Dominos Pulls Down Shutters In Three Cities

Finding that small towns are not all that hungry for world-class pizzas, the Rs 1200 crore Bhartia group (Jubilant Organosys, formerly Vam Organic) is exiting these towns to focus on big metros.

The company has closed its Nagpur, Bhopal and Indore outlets last week -- even before they celebrated their first anniversary on January 26, 2002.

Company sources said the Nagpur outlet was profitable, but had to be closed as it did not fit the "new business model" being followed by the group, which has initiated a consolidation exercise aimed at closing unprofitable centres.

The sources said as all raw materials ranging from a table napkin or office stationery to pizza base, mushrooms or chicken were sourced from the company owned supply store at Mumbai, it did not make sense to keep the Nagpur outfit open when those at Bhopal and Indore were being closed.

"We are getting shut of small towns which are bleeding us," the sources said. A senior officer, who requested anonymity, said Nagpur, Bhopal, Indore and Aurangabad operations started simultaneously on January 26, 2001, and while Aurangabad was closed a couple of months ago, Dominos bid adieu to the remaining three towns on the supply route last week.

Supplies for the four towns were brought in an air-conditioned refrigerated van every third day from Mumbai as the company refused to compromise on quality, insisting that the "unique Domino's taste" should be the same everywhere.

What was not consumed within its stipulated "freshness period" was thrown away. The cost of merely running the van at Rs 12.60 km per litre came to Rs 4.5 lakh per month!

Domino's Pizza India Ltd (DPIL) had invested around Rs 60 lakh in each outlet and was paying rent ranging from Rs 25,000 to Rs 50,000 for commercial premises from where they were operating in these towns.

The sources said the company was also closing down operations in other parts of the country and had recently shut outlets on the New Delhi-Jaipur road, Patiala, Bareli and an outlet at Pragati Maidan in New Delhi. "The Pragati Maidan outlet did thousands of pizzas on days when there was a fair on the grounds, on other days it did mighty few," said an executive as the reason for closing the outlet.

Domino's Pizza was the first truly international pizza brand to hit Nagpur and the outlet dished out what were easily the most expensive pizzas available in the town.