Domino’s Pizza will shut 172 loss-making stores in Japan in a bid to boost profitability.

“Some of our Covid-period expansion resulted in stores that simply weren’t optimal based on our current customer proposition and removing them will strengthen our network,” said Mark van Dyck, Domino’s Pizza Enterprises CEO and MD.

Of the 172 stores to be closed, 58 are franchised, while 114 are corporate-owned. Domino’s said that these stores are either in sub-scale prefectures, such as Iwate, unable to benefit from the company’s scale capacities, including supply chain and marketing, or were opened prematurely.

However, the company emphasised that Japan remains a high-potential market and that it will focus on profitable order growth in prefectures where it has a competitive edge.

The company will also trim its store networks in other markets, but to a lesser degree. In an email to Inside Retail, the company said it would close four stores in Australia and New Zealand and 23 in Europe.

The overall store closures are expected to generate US$6.3 million to $7.5 million annualised earnings before interest and taxes (EBIT) uplift with one-off restructuring costs of $38.9 million.

The company added that a comprehensive strategy review is underway to improve performance in key focus areas, including Japan and France.