Domino’s Pizza is set to exit Russia following unsuccessful attempts to make sale of it’s food in the country prompted by the decision of the US brand’s local franchise operator DPRussia to follow the footsteps of other Western companies in leaving Russia.
Domino’s Pizza is set to Exit Russia
Operating as the master franchisee exclusively for the Domino’s Pizza brand in Turkey, Russia, Azerbaijan, and Georgia, DP Eurasia N.V. has solidified a significant presence. Within this operational scope, the Group’s robust network of 142 stores in Russia stands as a notable achievement, accomplished by June 30, 2023. This presence traces its origins back to 1998 when Domino’s Pizza made its introduction to the Russian market through the inauguration of its inaugural branch as published by intellinews.
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DP Eurasia London-listed company announced its Russian subsidiary, DPRussia, is set to file for bankruptcy and halt operations in the country, as indicated in a regulatory filing on the London Stock Exchange.
In a progressively difficult environment, DP Eurasia faces no alternative but to take a crucial step by initiating bankruptcy proceedings. The company has announced that its Russian subsidiary, DPRussia, is set to file for bankruptcy and halt operations in the country which has cleary indicated in a regulatory filing on the London Stock Exchange. This strategic move strategically responds to the current situation and additionally sheds light on the current American fast food landscape in Russia. Ultimately, this move leads to Domino’s Pizza announcing the closure of all its outlets in the country.
This positions Domino’s as a key participant in the first wave of Western fast-food chains leaving Russia, aligning with the departures of McDonald’s and Starbucks. Notably, Starbucks has transformed into Stars Coffee, while the locations previously operated by McDonald’s have been relaunched as burger joints under the name Tasty, Period. Other rivals, such as KFC and Pizza Hut, have entirely withdrawn from the Russian market.
Why is Domino’s Pizza Shuting Down Their Business In Russia
As reported by “This is Money,” the company had previously signaled a reduction in further investment in Russia due to sanctions imposed in March. Alongside this, the company temporarily suspended royalty payments from its Russian operations. Additionally, the decision was made to allocate all earnings from franchises in Russia to support humanitarian efforts in Ukraine for the “foreseeable future.”
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It’s worth highlighting that this significant action is a result of an earlier announcement by the company. As stated by morning star, The company first announced its intention to exit on December 28, 2022. During that period, the company emphasized its continuous endeavors to engage in discussions about a potential sale of its Russian assets. Nonetheless, the results of these negotiations were still uncertain.
Furthermore, according to data from Ukraine’s Kyiv School of Economics, more than 750 out of 3,400 foreign companies tracked have either sold their Russian businesses or halted operations. This trend reflects the ongoing shifts in the business landscape influenced by various factors.
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