In response Domino's Pizza said it would exit its loss-making operations in Denmark, where it has 27 stores, and close another 65 to 70 stores out of its footprint of 913 corporate-owned stores around the world.
"Making the decision to close any store is a difficult one, but for these stores it is the right one," group CEO and managing director Don Meij said.
"The investment and focus required is a drag on neighbouring stores and a distraction for the system."
Domino's had purchased its stores in Denmark in 2019 for the bargain price of 2.5 million euros ($A4 million) after a Danish TV show highlighted food-safety violations, poor working conditions and rat-infested kitchens that forced the company into receivership.
But while the new team there won back some customers with a focus on food safety and hygiene, ultimately the reputational damage from the previous ownership was too great to overcome, said Europe CEO Andre ten Wolde.
Domino's also plans to shut its construction and supply arm in Australia and close its centralised dough-making commissaries in southeast Asia in favour of making dough in stores.
The various streamlining measures are expected to save the company an estimated $53m to $59m a year.
In February Domino's said its first-half earnings were down 14 per cent to $212.8m, which Mr Meij blamed on the company being too quick to pass on inflation to its customers, resulting in fewer orders.
"We are a volume business and less volume isn't helping," he said at the time.
Executives had pinned their hopes on a flexible digital voucher program that to lure customers onto the Domino's platform, but second-half same-store sales through to June 4 were only up 0.2 per cent, compared with expectations of three to six per cent annual growth.
In contrast from his remarks from February, Mr Meij was talking less about value and more about pizza quality and speedy delivery on Tuesday.
"We know pricing is an important part of the value equation for our customers, but so is the quality of the pizzas we deliver and the time in which they safely arrive," he said.
"These are the answers to growing weekly sales volume and improving unit economics in the short term."
At 1.35pm AEST on Tuesday, Domino's Pizza Enterprise shares were down 7.1 per cent to $42.99, their lowest level since late 2019.
