- Chick ‘n’ Dip will be trialled in 187 Domino’s stores ahead of national roll-out
- Domino’s Pizza Group shares have fallen by a third this year to a 10-year low
Domino’s Pizza restaurants in the UK will launch a new fried chicken menu, as the struggling group looks to revive its fortunes.
London-listed Domino’s Pizza Group, the US giant’s UK master franchise, has seen its value fall by a third since the start of the year amid weaker consumer demand and higher costs.
The group told shareholders on Monday a new ‘chicken sub-brand’, Chick ‘n’ Dip, would ‘help drive further growth for the core UK and Ireland Domino’s business’.
Chick ‘n’ Dip will be trialled in 187 Domino’s stores in the northwest of England and Northern Ireland before being rolled out nationally.
The brand will offer a selection of ‘hot and crispy’ chicken tenders, wings and boneless bites, accompanied by a choice of nine dips ‘inspired by flavours from around the world’, according to the group.
Domino’s said the launch can be fulfilled by its existing national supply chain and kitchens ‘with minimal capital investment’.
The group says Chick ‘n’ Dip will ‘help drive further growth for the core UK and Ireland Domino’s business’
Boss Andrew Rennie described Chick ‘n’ Dip as ‘a bold new chapter for Domino’s’, offering ‘a significant opportunity for our UK & Ireland business’.
Domino’s Pizza Group shares were down 0.6 per cent at around a 10-year low of 208.8p in early trading.
The group will update shareholders on third quarter progress in early November before hosting an investor event on 9 December.
Investors will hear plans for Domino’s loyalty scheme, digital progress, store openings and other strategic priorities.
It follows an open letter last week from former director and shareholder Usman Nabi, who urged Domino’s to quadruple the size of a recently announced share buyback programme and to scrap any takeover plans.
Shore Capital analysts wrote in a note on Monday: ‘Domino’s has been exploring new ways to scale the business, with talks of acquiring a second brand, separate from Domino’s.
‘Note that the group was rumoured to be considering buying Wingstop at the end of last year before PE Sixth Street acquired it for £400million, so the sub-brand move into the chicken market does not come as a huge surprise to us.
‘We believe management is still exploring M&A options for a second brand. However, with the launch of Chick ‘n’ Dip and the recent £20m share buyback announcement, we think it is less likely that something will emerge this year, making it more of a medium-term strategy.
‘Whilst the stock remains optically cheap, we have a hold on Domino’s. This reflects our concern about ongoing consumer headwinds and our now lower full-year forecast expectations.’
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