June 18, 2023

Domino’s Closing Thousands Of Stores As Retail Apocalypse Hits America’s Largest Restaurant Chains

by daily.whatfinger.com

The largest restaurant chains in America are struggling to overcome waning demand as the economy continues to slow down. Even giants like Domino’s Pizza, which operates almost 19,000 stores worldwide, are reporting a series of challenges and financial losses in 2023. The chain is now closing thousands of underperforming locations after recent price hike controversies depressed domestic and international sales and sent its shares plummeting to the lowest level in over a decade. The latest data shows that the pizza company is in far more trouble than we all thought, and experts say that if it fails to fix its problems before the current downturn gets worse, the American pie chain may rapidly become overwhelmed by its debt and fall victim to the Great Retail Collapse.

In February, conditions for the company have gone from bad to worse. In a single day, share prices plunged by a whopping 16%, marking the largest price decline since 2010. From that point on, share prices have continued to trend down, settling around $310 per share, or about 39% lower than during the same period a year ago. Now, thousands of stores have started to close, with Domino’s making the tough decision to shutter its entire operations in some areas due to profitability concerns. It all started when just like many other US restaurants, the pizza chain started to adjust to the inflationary environment and raise its delivery and menu prices to offset higher labor and commodity costs. In October 2022, executives reported a 7% price hike that prompted many customers to cook at home instead of getting their meals delivered.

Overall, the chain’s prices remain 12% higher than pre-pandemic levels, according to Eat This, Not That. Industry experts argue that its pricing strategy was not efficient given that the company failed to consider changing consumer spending habits and how competitors’ price increases compared to its own. A new report reveals that Americans became very dissatisfied with the new prices, which led sales to sink all across the country. Delivery problems are also weighing on Domino’s bottom line. The Michigan-based pizza brand is still experiencing a serious shortage of delivery drivers. With workers seeking out higher wages and better working conditions en masse, many just aren’t interested in delivering pizzas anymore.

Despite this clear shift in the US labor market, Domino’s has been hesitant to partner with third-party delivery options like GrubHub or DoorDash, thus, losing customers to other rivals. In America, the chain is losing ground and market share. Over the past six months, Domino’s significantly underperformed rivals including Pizza Hut and Papa John’s, which actually benefited from new menu news and third-party delivery marketing and driver service. Its unwillingness to adapt to the current market and while rivals get stronger and snap more market share may throw the company over the edge. Considering how high its debt currently is and the depth of its profitability concerns, Domino’s must come up with better strategies to rebalance its finances soon because not even the largest pizza chain in the world is infallible and immune to the impact of recessions and downturns. This could be the beginning of the end for the company as the US retail apocalypse continues to claim more and more struggling businesses that fail to differentiate themselves in this wildly competitive market.

The Fall of Franchises: The Shift in U.S. Business Landscape in 2023

A franchising business model, once thought invincible, is now showing signs of crumbling in the U.S. market. Several large franchises have closed doors in 2023, marking a shift from the traditionally successful model.

Franchising has been a cornerstone of the American economy, transforming local enterprises into nationwide powerhouses. By selling the rights to their business model and branding, companies have been able to expand more rapidly than they could have alone. However, recent trends show that this established method of business growth is facing increasing challenges.

In 2023, some of the largest franchises, once unassailable, went out of business. Economic, social, and technological factors have contributed to this shift.

A critical factor leading to this change is the enduring impact of the COVID-19 pandemic. Many franchises faced shutdowns during peak periods of the pandemic, with certain industries hit harder than others. The retail and restaurant sectors, which heavily rely on foot traffic and in-person dining, have been particularly affected. Despite the economy reopening, these businesses struggled to bounce back, facing increased costs and decreased demand.

The economic downturn has also seen consumers become more budget-conscious, leading to reduced spending in several franchise sectors. Even as the economy began to recover, many consumers maintained their frugality, seeking out lower-cost or alternative options. This shift in consumer behavior directly impacted franchises operating in non-essential industries.

Technological advancement is another major contributor to the decline of franchises. The rise of e-commerce, the sharing economy, and digital services has disrupted traditional business models. Brick-and-mortar stores are facing intense competition from online retailers, who offer broader selection, competitive pricing, and the convenience of home delivery.

Moreover, the market saturation of franchises in certain sectors has led to intense competition, thinning profit margins, and the inability of some businesses to keep up. In the fast-food industry, for example, market oversaturation has led to a steep decline in sales for some brands, resulting in closures.

The changing expectations of the American workforce have also played a role. With a generational shift towards valuing flexible work schedules and remote work, franchises in sectors that demand a physical presence are struggling to attract and retain employees.

Despite the challenging landscape, some franchises are adapting and innovating to stay afloat. Many have turned to technology, such as implementing mobile ordering or offering delivery services, to meet changing consumer demands. Others are investing in employee benefits and flexible work arrangements to retain their workforce.

The closure of franchises is indeed a significant development in the U.S. economy. However, it is important to remember that business environments are dynamic and that the decline of certain models can lead to the rise of new ones. As we move forward, it will be interesting to see how franchising evolves to meet the changing economic, social, and technological landscape.

2023 marks a turning point for franchises in the U.S. The combined forces of a pandemic-induced economic downturn, shifts in consumer behavior, technological disruption, market oversaturation, and changing workforce expectations have proven too much for some of the largest franchises. Nevertheless, these challenges also present opportunities for innovation, making the future of franchising a compelling space to watch.

http://daily.whatfinger.com/dominos-closing-thousands-of-stores-as-retail-apocalypse-hits-americas-largest-restaurant-chains/