Domino’s Pizza is looking to take a slice of the booming fried chicken market in a bid to turn around its stagnant sales growth.
The FTSE 250 company will launch its new ‘Chick ’N’ Dip’ brand in 187 stores across the north west of England and Northern Ireland before rolling it out across the country.
Like its rivals, Domino’s Pizza has seen customer demand for its takeaways fall over the past few years. The chain was forced to cut its annual profit guidance last month after like-for-like sales fell 0.1% in the first half of this year.
CEO Andrew Rennie said there was “no getting away from the fact that the market has become tougher”.
By contrast, Brits’ insatiable appetite for fried chicken shows no sign of slowing, with the UK market now worth £3.1bn each year, according to KFC.
It is leading to a rush of activity among fast food chains, with KFC investing almost £1.5bn over the next five years to try and capitalise on the popularity, while Popeyes is planning to open 350 sites by 2031.
“Chick ‘N’ Dip is a bold new chapter for Domino’s,” said Rennie on Monday.
“By creating a dedicated concept that combines globally inspired flavours with high-quality chicken, we’re opening up a significant opportunity for our UK & Ireland business.”
Chick ‘N’ Dip will be fulfilled by Domino’s existing infrastructure, meaning it needed “minimal capital investment”, the company said.
Domino’s has previously made clear its intention to acquire a second brand to help it turn around its fortunes and confirmed that the launch of Chick ’N’ Dip would not affect that.
“We would like a second brand simply because we have this massive infrastructure and we have all this knowledge, the people, the customer base, the delivery drivers and all these amazing franchisees to help us launch another brand,” Rennie told the Times.
“I think the launch of Chick ’N’ Dip is going to give people more confidence that we have the right and ability to do that.”
However, the strategy is causing friction with some investors. Browning West, an activist investor with a 5% stake, told Domino’s board it had “significant reservations” about the company’s plan to purchase another brand.
It argued such an approach would be “far easier to execute and at a greater scale in a private setting”.
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