Reheated: Domino’s CMO Adam Ballesty quits, former marketing boss Allan Collins returns as sales slow, investors crunch share price $9bn in 18 months; Maccas, KFC dominate
L-R: Domino's CMO Adam Ballesty quits, Allan Collins returns as Australia's biggest pizza chain faces new customer and competitor pressures.
After designing a “more for more” consumer marketing program to counter rising raw material costs and appointing start-up agency It’s Friday to handle the retailer’s creative business, Domino's Australian CMO Adam Ballesty has exited the Brisbane-based global pizza chain and one-time stock market darling after joining the group 2021. Last week Domino’s share price dived by nearly a quarter to $54.37 after it warned sales and home delivery orders were slowing and pre-tax profits were down 30.6 per cent for the December half across the global network. Although European and Asian sales were hit harder than Australia, the stock slide continued to $49.96 yesterday, valuing the once hot quick service restaurant at $4.45bn. During Covid, sales roared along with a $12bn-plus market cap – yesterday it was trading at a third of its value compared to September 2021.
What you need to know:
- Adam Ballesty has quit as Domino’s CMO, citing travel and family as a key reason for leaving.
- Domino’s, a poster child for investors before and through Covid, is under pressure after hiking prices to recover increasing costs, resulting in lower volumes.
- Former Domino’s marketer, Allan Collins, has returned – said to be close with Domino’s biggest shareholder and billionaire Hungry Jack's kingmaker, Jack Cowin.
Former Diageo marketing and innovation boss Adam Ballesty has quit as CMO of Domino's as its biggest rivals Maccas, KFC and Subway power on, smaller challengers like Guzman Y Gomez and Taco Bell eye expansion and Pizza Hut stages a comeback.
Domino's and Ballesty did not respond yesterday but sources with knowledge of the changes said former marketing boss Allan Collins has returned after leaving the business two years ago.
They said Ballesty had made a call to quit because the Sydney-based marketer was spending more than half his time away from family in Brisbane HQ and was not enjoying increasing demand to be away.
More broadly, the one-time QSR growth darling is facing pushback from customers after passing on price rises which in some cases saw its $5 pizzas rise to $8. Domino’s is the top pizza chain in Australia and the no.5 QSR chain in Australia behind McDonald’s, KFC, Hungry Jack's and Subway. But a resurgent Pizza Hut (run here by private equity firm Allegro Funds), a booming Guzman Y Gomez and the ramped up ambitions of KFC and Pizza Hut sister chain Taco Bell are ongoing pressure points for Domino’s.
This week the company is staging its annual franchisee conference on the Gold Coast at which the It’s Friday agency team – appointed by Ballesty in January 2022 as the pizza chain’s start-up local creative shop – landed the top Domino’s franchisee supplier award. That is likely to settle any immediate conjecture on It’s Friday's future by speculative rivals. (Update: so much for that theory, It's Friday was flicked four weeks later.)
Ballesty during his time at Domino's restructured what was considered a traditional “pre-internet” marketing team of about 45 people into two key functions: customer acquisition and brand in one unit and growth and retention in the other, supported by a marketing services unit which provided strategy, insights, data, design and innovation for the group.
In an Mi3 podcast last year Ballesty said Domino’s had “some of the cleanest” first party data he has seen as all QSR restaurants race to build customer databases and loyalty programs. McDonald's this week announced it is starting home delivery orders via its app, generating rewards points for customers while KFC continues its trial of drone-delivered chicken in Brisbane.
The immediate priorities of Allan Collins, a Domino’s veteran, are unknown, but he is understood to have started about a week ago.
Update – Domino's has issued the following statement:
“In his tenure as Domino’s ANZ Chief Marketing Officer Adam Ballesty helped ensure the ongoing profitability of our franchisees, whose stores are at the heart of our business, as the world responded to the extraordinary challenges of Covid, and then inflation.
“Adam was instrumental in launching one of our most successful product campaigns, Burger Joint Pizzas; helped increase the Domino’s App share to record levels; and developed a number of value-driven offers for our customers (Hunger Savers and Value Max to name a few), to solidify the brand’s position as the number one pizza company in ANZ.
“We thank him for his leadership and tireless pursuit of profitable sales growth in one of the most challenging operating environments in history.
“We respect his decision to step down from the CMO role due to family commitments, and the ongoing toll traveling between his home in Sydney and Domino’s HQ in Brisbane was taking, and wish him every success in the future.
“While we are sad to see him go, we are fortunate to be in a position where we can appoint someone to the role who knows the Domino’s brand like no other: Allan Collins.
“Allan served as Domino’s CMO from 2007 to 2021, during which time he supported Domino’s to achieve significant growth and success through a number of witty, creative and outside-the-box campaigns.
“We are excited to welcome him back to the brand after his ‘first effort’ at retirement and can’t wait to see what his Domino’s sequel brings.”
