Meltdown at Domino’s: Is the world’s biggest pizza chain doing away with discounts?

Dubai: Domino’s, the world’s largest pizza chain, is battling mounting challenges across its global network — from weak sales in the United States to mass store closures in Asia and Europe.

Its Australian arm, Domino’s Pizza Enterprises (DPE), the brand’s biggest international franchisee, has become the epicenter of the downturn, posting losses, cutting dividends, and closing outlets as investors grow restless. Once a pandemic-era darling, the company now faces one of the toughest chapters in its history.

The Sydney-listed group, which controls more than 3,700 stores across markets including Australia, New Zealand, Japan, and Europe, reported a net loss of A$3.7 million in the year to June 2025. That compares with a A$96 million profit a year earlier. A dividend cut and restructuring costs from shutting more than 300 stores — mostly in Japan — have only deepened concerns.

Shares in DPE have collapsed 88% from their 2021 highs, when delivery demand surged during COVID-19 lockdowns. The stock plunged another 22% on Wednesday, trading around A$15 — a far cry from its A$161 peak.

At the center of the turnaround effort is 83-year-old billionaire Jack Cowin, founder of Hungry Jack’s and Domino’s largest shareholder with a 27% stake. Cowin recently stepped in as interim executive chairman after the sudden resignation of CEO Mark van Dyck, who lasted just one year.

Cowin has vowed to cut costs and end heavy discounting, shifting Domino’s to a Bunnings-style “everyday low price” model. “Customers had been trained to only buy a pizza when a voucher was available,” he said, noting the old approach complicated operations and hurt franchisee margins.

The new strategy offers consistent, transparent pricing and is part of an “aggressive action plan to reduce costs,” including major changes to advertising. “We will tolerate a reduction in sales if it is more profitable,” Cowin added, emphasizing that improving franchisee returns is central to the turnaround.

But analysts warn that execution will be difficult. “Until Domino’s is able to deliver significant same-store sales growth, franchise profitability will remain under pressure,” said RBC Capital Markets analyst Michael Toner, who rates the stock a “sell.”

The company has also walked back its ambitious global growth targets. Domino’s once aimed to double its store network to more than 7,000 by 2033, but weak performance in Japan and Europe has forced a rethink. Instead, management is prioritizing consolidation, shutting underperforming outlets, and focusing on organic growth.

The turbulence comes after long-time CEO Don Meij retired in late 2024 following nearly four decades at the company. His departure, followed by van Dyck’s exit, has left investors uneasy about leadership stability.

“Rapid leadership turnover clouds direction and makes it harder for investors to buy into a long-term growth story,” said Josh Gilbert, analyst at eToro.

The challenges are not limited to Australia. Domino’s Pizza Inc., the U.S.-based parent company, recently reported a surprise decline in same-store sales in its home market, hurt by inflation and softer consumer demand. U.S. delivery traffic slowed as households cut discretionary spending, while competition from delivery apps intensified.

Although international markets delivered growth, margins in U.S. company-owned stores shrank due to higher food costs. Domino’s U.S. is betting on its new partnership with DoorDash and menu innovations, such as parmesan-stuffed crust pizza, to regain momentum.

For Domino’s in Australia, the turnaround hinges on restoring trust with both franchisees and investors. Cowin has promised “this is not business as usual” and says the focus is now squarely on profitability, not expansion at all costs.

Still, with weaker-than-expected trading early in the new financial year and analysts openly debating whether the sales slump is structural, the path forward looks uncertain.

For a company that became synonymous with fast, affordable pizza delivery, Domino’s faces a tougher recipe: cutting costs, regaining customer loyalty, and proving it can grow again in a crowded, post-pandemic fast-food market.