Domino’s European Business Loses Sales

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Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. franchise / ˈfræn tʃaɪz / (n) – a business that was given right to sell a company’s products or services
    Example:

    I don’t have to drive 30 minutes to buy that ice cream because a franchise just opened in my area.


  2. break even / ˈbreɪk ˈi vən / (idiom) – to earn profits equal to one’s expenses
    Example:

    With our huge sales, I’m confident that our company will break even.


  3. on bad terms / ɒn bæd tɜrms / (idiom) – in a situation wherein two or more people are in disagreement
    Example:

    The two managers are on bad terms because they had an argument last week.


  4. stick by (someone) / stɪk baɪ / (phrasal) – to remain supportive of someone
    Example:

    The businessman decided to stick by his partner through difficult times.


  5. dispatch / dɪˈspætʃ / (v) – to immediately send out someone or something to a particular area for a certain purpose
    Example:

    The manager dispatched more workers to help set up the newly-opened store.


Article

Read the text below.

US pizza chain Domino’s announced that its Europe franchises had suffered weak sales.


Sales of Domino’s Pizza Group plc, the restaurant’s European arm, struggled in Germany, Iceland, Liechtenstein [LIK-tuh n-stahyn], Norway, Sweden, and Switzerland. In the first quarter of the year, the restaurant earned £25.1 million, which was a 2% decrease from last year’s £25.6-million sales. Because of the disappointing results, the company is no longer hoping to break even the whole year.


Domino’s Pizza Group plc CEO David Wild attributes the loss to expensive operating costs and high expenditures, especially in Norway, Sweden, and Switzerland. On top of these, the company is on bad terms with its franchise owners because they are demanding a higher share of profits.


Despite the issues, the company is sticking by its European franchises. It has dispatched new management to improve the efficiency of its international stores. The company is negotiating also with its franchisees about terms of ownership.


On a positive note, the sales of Domino’s Pizza Group plc remain strong in the United Kingdom, where it is headquartered. This success was driven by the pizza chain’s four new stores and robust online sales. Because of these, Domino’s Pizza is still the most popular takeout food in the United Kingdom, with a 4.8% sales growth in the first quarter of 2019.


However, its popularity is being challenged by delivery firms such as Uber Eats and Deliveroo. Through these delivery services, Domino’s rivals can now deliver products straight to customers, as well. Nonetheless, Domino’s Pizza is confident that its brand, reputation, and profitability will protect it from losing against competitors.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you think it was a good idea for Domino’s to continue supporting its European franchises? Why or why not?
• If you were a part of Domino’s new management, what would you do to improve the company’s international sales?

Discussion B

• What do you think are the challenges of running a food chain? Discuss.
• How can these challenges be overcome? Discuss.