Domino's Pizza Italian exit explained with big data

"Why would you import pizza to Italy anyway?" I asked our Italian colleagues after we heard that Domino’s Pizza is leaving the Italian market which it tried to conquer with its American version of the staple food. Naturally, we wanted to look at data from our Italian BI tool Outlet Census Live (free demo now available) to find more clues for Domino’s sudden retreat. And we have found one very obvious reason.

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The data on Domino's Pizza and Italy

In SharpGrid, we collect digital data from dozens of digital sources (related to the on-trade / HoReCa channel), process and cross-reference them and in the end, we can extract crucial business information about any given outlet or point of sale in the market, including Domino’s. In this case, we wanted to compare the quality and engagement of Domino’s on-trade / HoReCa restaurants against:

• National average
• Restaurant’s average
• Fast food average
• The cities’ where Domino was present average

For that we used 2 Outlet Census crucial indicators:

Consumer engagement: The number of reviews, likes, complaints etc. for a given outlet. This value represents how much customers interact with the outlet and correlates closely with the amount of consumer traffic in the outlet. Higher numbers usually signal the place is very good (lots of likes and good reviews) or very bad in terms of quality (a lot of complaints). Generally, it means the place stirs a lot of positive or negative emotions amongst its customers.

Consumer rating: This is an aggregated average of all reviews from all digital sources available to us such as Tripadvisor, Google Maps etc. Thus, it serves as an indicator of the place’s overall quality, be it food, service, ambience etc.

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Why did Domino’s Pizza leave the Italian on-trade market?

Some say the only love triangle you need is a pizza slice. But maybe not from Domino’s. While the media cited poor delivery services during the covid period as one of the culprits, we've found another reason. And It's half cultural and half qualitative.

In terms of quality (customer rating), Domino’s outlets have pretty dismal numbers in Italy. Just compare the average customer ratings and see for yourself:

The difference shown in the graph above doesn't look too big at first glance, but it actually puts Domino’s Pizza in the lowest 3,5% of all Italian on-trade / HoReCa outlets. Pretty bleak number! 

One reason for this might be that there is a lot of competition for pizza in Italy. Italians go out for pizza the same way people in other countries go out for a beer. You have a pizzeria literally on every corner, very often high-quality with fresh local ingredients. And they're not even that expensive. So why would you go to a fast-food chain like Domino's with restaurant-like prices?

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Domino's Pizza had very engaged customers

The engagement rate for Domino’s Pizza outlets is above the national average, but in this case, it’s not a good thing as the reviews are quite often negative. One common thread is complaints about the quality of food and service. In other words, Domino’s Pizza managed to anger so many customers they felt compelled to leave a lot of angry reviews with low ratings. And we all know how fast word of mouth spreads.

The engagement shows one important thing: Italians gave Domino’s a chance (lots of engagement = lots of traffic) but were unimpressed with it in the end.

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Italians vs Domino's Pizza on the city level

And how did Domino’s fare on the city level? Not great, again. Here’s a table of average customer ratings for all the cities Domino’s was operating in:

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As you can see, most of them hover around the national average. Compare it to Domino’s subpar 3.75 average and you see it’s not the problem of location as well. It’s about the overall quality of Domino’s on-trade / HoReCa outlets. 

And if you’re wondering whether there are better and worse Domino’s places, then yes, there are, but only 4 out of 26 have an average rating above 4 and the best one has just 4.16 which puts it in the worst 14% of all Italian on-trade / HoReCa outlets. 

There is just no salvation for Domino’s Pizza in the data. 

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Domino's Pizza controversy

Apart from the quality, there is also the cultural angle. Domino’s Pizza is known for its “controversial” pineapple pizza but also “weird” pizzas like “cheeseburger” or “BBQ chicken”. We're not against innovations (we’re a disruptive tech/data company after all), but here it might have been a misstep. As one of our Italian colleagues noted: 

“If you start putting weird stuff on the pizza, Italians are not gonna be happy. Of course, you have places in Italy serving unique pizzas with shrimp or pineapple, but you go there just once to experience something out of the ordinary. And it’s usually of great quality. Domino’s is an American-style pizza with all kinds of weird ingredients and fast-food quality. And even though the younger generation is more open to international food like sushi or kebap, pizza is such a staple cuisine for Italians we are probably not willing to accept this new, imported style from the USA.”

 We tried to avoid being stereotypical, but it turns out Italians are really proud of their pizza heritage, enjoy it quite a lot and put a strong emphasis on quality. Not surprising since it’s a food whose history goes back centuries. Domino wanted a slice of the market but was left with an empty box and thus the saga of American pizza in Italy came to a definitive end. 

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SharpGrid is a data & tech company reinventing market research in the on-trade channel. The on-trade channel consists of POSs (points of sale) like restaurants or bars where food & beverage is bought and consumed, and is often also called HoReCa, on-premise, food service, out-of-home, gastro or immediate consumption (IC) channel, hospitality or on-licence.