Domino’s Franchises Want A Bigger Slice


Monday, 10 December: Shares in London began cautiously with Brexit uncertainty and development, without doubt, the prominent reason behind declining shares. After the EU Court of Justice then confirmed that the UK could reverse the Brexit vote without the backing of other members the pound was put under more pressure. Before traders had barely finished breakfast GDP figures then showed the UK economy grew at a slower rate for the three months through October, expanding 0.4% which was lower than the 0.6% for the three months through September. So, it was a fairly eventful start to the week. Of course, on the ‘eve’ of the Brexit vote traders were justified in their caution. But by the afternoon we were informed that Theresa May had decided to delay the vote if anything somehow conjuring up more uncertainty, this sent the pound to 18-month lows.

Interserve shares were the biggest faller on the day after unveiling some details of their deleveraging plan, which will likely see a large segment of the debt converted into new equity. Shares closed over 50% lower at around 11p, over £1 less than earlier this year when they reached around £1.20.

With many retailers relying on one of the most pivotal festive seasons in years, figures that showed the lowest level of footfall at shopping centres since the peak of the financial crisis will have done nothing to alleviate fears. Physical stores again appearing to be missing the benefit of sales events such as Black Friday.

Domino’s pizza shares also had a tough time today amid escalating rows between its franchises. A Sunday Times article reported that 11 of the company’s biggest franchises have written a threat to ‘declare war’ unless they get a bigger slice of the company’s profits, pun surely intended. Shares eventually closed almost 8% lower. Poor performance of late for the shares have been in contrast to strong sales and continued store openings, albeit at a slower rate than planned, with this disagreement one reason for that.

In quite un-surprising fashion, Thomas Cook shares also shed another 13% today. As we write American markets have followed the global trend today and are seeing considerable falls, the Dow down over 1% at the moment.

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