Dan Coatsworth, head of markets at AJ Bell, said: “It says a lot when a veteran of the Domino’s Pizza empire is deemed not good enough to run the UK version of the company.
“This looks like a situation where the board are sending a message to the market that something radical must change.
“Andrew Rennie took the top job two years ago, bringing oodles of experience from running the pizza group in various parts of the world.
“One could call him a pizza lifer, having opened his first franchise Domino’s store in his mid-twenties.
“The board of the UK operations and Rennie have mutually decided he should no longer have a slice of the action.
“The clue lies in the miserable share price performance since he took the reins.
“Behind closed doors, it’s possible the board was coming under pressure from shareholders asking why strategic actions aren’t resonating with the market.
“Ultimately, investors hold the shares to make money, and over the past year their wealth in the company has melted away faster than an ice cream on a hot day.
“Rennie helped to smooth relations with disgruntled franchisees, and drive efforts to make lunchtimes less quiet through broadening the product range to include wraps.
“More recently, he has capitalised on existing supply chain relations to broaden out into baked chicken. On paper, this is about doing more with what the business already has.
“However, the market doesn’t seem to think it is the right thing to do, given the two-year slide in the share price.
“Domino’s is trying to adapt with the times as competition for fast food is intense, and consumer tastes are evolving.
“Healthier eating habits, as well as appetites being diminished by weight-loss drugs, means Domino’s is in a precarious position.
“Greasy pizzas might be everyone’s dream after a few pints in the pub, but they’re increasingly off the menu for many other people.”
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