Domino’s closes commissaries in SEA

It is also planning on downsizing its current corporate store network by 15% to 20%.

Domino’s has announced the closure of its commissaries in South-East Asia as part of its recently announced cost-cutting measures.

According to APAC CEO Josh Kilimnik, the closures of commissaries in South-East Asia, acquired as part of the acquisition, would deliver not only immediate savings for DPE and stores but also improve supply chain resilience and product quality.

The commissaries to close are Taiwan, Malaysia, Singapore, and Cambodia. Kilimnik said that they identified the opportunity to complete these facilities and move to in-store dough making, rather than making dough in a centralised facility and shipping this to stores.

“After extensive testing and roll-out in Japan, using the deep experience in other markets such as ANZ, we are pleased we can move to in-store doughmaking in all Asian markets. Taiwan has recently been completed. As a result, we will close the commissaries in Malaysia and Singapore, and move to distribute ingredients from partner warehouses – similar to the existing distribution model in Australia. This decision will provide customers a fresher, higher-quality product, reduce outages during high volume trading or extreme weather, and deliver savings for stores,” Kilimnik said

Domino’s said that with all geographies successfully integrating onto the new generation OLO during the year, the useful life of legacy assets has been shortened resulting in the accelerated amortisation of A$7m. The commissary closures and the accelerated amortisation of legacy assets are estimated to deliver annualised EBIT saving of between A$5m – A$7m, benefiting DPE and National Advertising Funds.

The closures are expected to result in A$10 to $A12m of non-recurring costs during FY2023.

Domino’s also plans to downsize its current corporate store network by 15% to 20%.