Domino’s shuts 29 Italian branches amid competition

The birthplace of pizza has vanquished America's largest chain of pies.

Domino's has shuttered 29 of its 29 branches in Italy, seven years after opening operations in the country, Bloomberg reported on Tuesday.

The business news outlet said that new delivery operations there born during the pandemic created an unexpected competition that sunk plans to open 880 stores over time.

A Domino's representative didn't respond immediately to a request for comment. In January, its Italian franchising partner cited increased competition as hurting expansion plans.

The issue is related to the increased level of competition in the food delivery market, with both organized chains and mom pop restaurants delivering food, to service and restaurants reopening after the pandemic and consumers out and about with revenge spending, the group, ePizza SpA, said.

In an email to NBC News, Federico Tozzi, executive director of the Italy-America Chamber of Commerce, said that Domino's could not challenge the country's existing pizza sources, while other American fast food chains like McDonald's and Starbucks continue to thrive in Italy.

In Italy there are so many great pizza places, some of which are organized in franchises that the Italian consumer has so many great choices and therefore does not see Domino's as a valuable alternative, he said.

Domino's reported otherwise healthy sales outside Italy during the pandemic, but in its most recent corporate earnings it said it is struggling to find qualified drivers and is working to manage higher food prices due to the inflationary environment.

CFO Sandeep Reddy said the delivery business was more pressured due to competition from third-party delivery apps.