Why Domino's Failed In Italy

Selling a thoroughly American pizza to Italians, the inventors of pizza, seems like a venture doomed from the start, but I suppose no one said as much to Domino's back in 2015. Bloomberg reports that after seven years of attempting to grow its presence in Italy, Domino's Pizza has closed the last of its Italian locations despite prior plans to open 880 stores across the country.

The closures took some customers by surprise, as they turned to the pizza chain's Italian social media channels to find out why their orders weren't going through. As it turns out, Domino's Italian operations have been in turmoil for some time. ePizza, the company with which Domino's entered into a franchising agreement in 2015, filed for court protection from creditors back in April. The protection meant that lenders couldn't seek debt repayment (or seize property as repayment) for 90 days—but that protection ran out on July 1. By July 29, Domino's had stopped offering delivery on its website and had racked up a reported $10.8 million in debt by the end of 2020.

The reason for Domino's demise in Italy might seem obvious: already exposed to some of the best pizza in the world, Italian consumers simply don't have need for the Domino's version. However, there are potentially reasons beyond a possible company/consumer mismatch. CNBC reported that Domino's came into the Italian market on the premise that it would entice Italian customers by using locally sourced ingredients and offering home delivery, something that wasn't as common at the time.

Unfortunately, these two pillars were not strong enough to sustain the brand. Once the pandemic hit, many local restaurants started offering delivery, meaning Domino's could no longer differentiate itself this way. In an earnings report, ePizza cited "significantly increased levels of competition in the food delivery market" as part of the reason for the lack of success.

Domino's couldn't hack it in Italy, the land of good pizza. This is at least in part because of a phenomenon we've already seen play out in recent history: When American fast food tries to break into a market where that cuisine was invented, it can fail pretty spectacularly.

As far back as 1992, and again in the early 2000s, Taco Bell attempted unsuccessfully to open locations in Mexico, Vice explained in 2017. Multiple issues arose, but the commonality across both attempts was that Mexican consumers simply did not want Taco Bell's spin on their food. Thankfully Chipotle hasn't made the same mistake... yet.

There's no shame in trying, but Domino's admitting defeat in Italy is probably for the best. Leave the pizza tracking to the rest of us who live in nations where where world-class pizza maybe isn't available on every corner.