Domino’s Pizza Will Close All 142 Stores in Russia

Domino’s Pizza, one of the prominent Western fast-food chains, has announced its decision to shut down all its outlets in Russia, making it one of the first major players to exit the country after McDonald’s and Starbucks departed over a year ago.

The franchise rights for the Domino’s Pizza brand in Russia, Turkey, Azerbaijan, and Georgia are owned by DP Eurasia. On Monday, the company disclosed its intention to file for bankruptcy for its Russian unit, DPRussia.

This move underscores the complex choices that Western companies are facing, especially those that chose to remain in Russia post the commencement of the Ukraine war. The Russian government has significantly raised barriers and expenses for Western firms attempting to sell their businesses in the country. Moreover, in certain cases, it has taken over control of local assets owned by foreign companies, a precedent set by Danish brewery Carlsberg and French yoghurt manufacturer Danone.

DP Eurasia issued a statement: “With the increasingly challenging environment, DPRussia’s immediate holding company is now compelled to take this step, which will bring about the termination of the attempted sale process of DPRussia as a going concern and, inevitably, the group’s presence in Russia.”

The financial ramifications of potential insolvency are yet to be ascertained.

Currently operating 142 stores in Russia, DP Eurasia stands as the third-largest pizza delivery business in the country. Back in December, the company revealed its ongoing review of its operations in Russia and its contemplation of a potential sale.

It’s possible that new ownership and branding could sustain the pizza outlets in Russia, a model similar to how local entities took over McDonald’s and Starbucks operations, rebranding them as “Vkusno i tochka” (Tasty, period) and “Stars Coffee” respectively.

Domino’s Pizza Inc (DPZ), listed on the New York stock exchange, stated that it ceased providing support for the Russian market through its subsidiaries early in 2022.

According to findings from Yale University researchers, more than 1,000 foreign companies have either exited or suspended their operations in Russia since the initiation of the full-scale invasion of Ukraine by the Kremlin. Additionally, around 378 global firms continue to operate within Russia, though nearly half of them have curtailed new investments and reduced their activities in the country.