Domino’s CEO quits as profits plunge and franchisee row rumbles on

Domino’s CEO David Wild has announced his retirement after revealing pre-tax profits of £30.5m, a drop of 27%, for the first half of the year. Chairman Stephen Helmsley also said he would be stepping down.

Though group sales were up 4.7% to £645.8m, Wild said the “complex” ongoing row with franchisees is leading to delays in new openings and impacting on standard working practices, and that any resolution would take “some time”.

He also said the performance of Domino’s international business was “very challenging”. But it was better news in the UK, where UK and Ireland like-for-like sales were up 3.9%.

“Our core UK and Republic of Ireland markets delivered a good performance, with system sales up 5.5% and underlying operating profit up 7.1%,” said Wild. “Digital remains a key driver of customer engagement, with online now accounting for 82% of total sales in the UK.

“The relationship with our UK and Ireland franchisees is very important to the long-term sustainable growth of the system. We are actively involved in detailed discussions and are giving these considerable focus and attention.

“Whilst dialogue is continuing, new store openings are being delayed and some of our working practices are being impacted. The situation is complex, and we expect resolution will take some time, likely into 2020. We are committed to working with our franchisees to agree sustainable win-win solutions.”

“The performance of our International business is very challenging and trading visibility remains limited. The weakest performance was in Norway, although we also saw increasing losses in Sweden and Switzerland.

“Iceland profitability was impacted by the weak macroeconomic backdrop. We are very focused on improving our operational capability across our International markets and will provide a further update at our full year results.”