This article is more than 1 year old

This article is more than 1 year old

Domino’s Pizza Group has spent £7m stockpiling ingredients including tomato sauce in case a no-deal Brexit disrupts supplies.

The company said the probability of shortages of ingredients since its update in March had increased.

Domino’s buys flour and cheese in the UK but it gets the tomato sauce for its pizza bases from Portugal. Other imported ingredients added to the stockpile include frozen chicken and all long-life ambient products, such as tuna and pineapple.

British importers of perishable food are particularly exposed to the threat of a no-deal Brexit, which most trade experts believe would cause delays at the border and increase the possibility of higher prices. Boris Johnson’s government has committed to leaving the EU on 31 October with or without a deal.

“A potential no-deal Brexit carries the increased risk of disruption to raw material supplies into the UK and foreign exchange volatility which could increase food costs,” Domino’s said on Tuesday.

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Any Brexit disruption would come at a tricky time for Domino’s, which is searching for new leadership amid a stuttering European expansion drive and a long-running dispute with franchise holders over the share of profits.

The chief executive, David Wild, will step down this year after a successor had been found, the company said.

Stephen Hemsley, the chair of Domino’s board, will leave the company after overseeing the recruitment of Wild’s replacement, after which a successor will “refresh” the board.

Wild will continue to oversee discussions with franchisees, who have refused to open more stores until they are given a bigger share of profits, according to the Sunday Times.

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Wild said Domino’s was “actively involved in detailed discussions” with franchisees in the UK and Ireland, but warned a resolution could take more than six months.

“While dialogue is continuing, new store openings are being delayed and some of our working practices are being impacted,” he said. “The situation is complex, and we expect resolution will take some time, likely into 2020.”

Wild said conditions at its European operations were “very challenging and trading visibility remains limited”. Sales in Europe fell by 3.4% year-on-year in the first six months of 2019.

Domino’s, originally a US brand, opened its first UK outlet in Luton in 1985. In 1993, Colin and Gerry Halpern bought the British and Irish franchise. Online sales now account for 82% of British sales, but despite recent sales growth the company’s share price has been dented by competition from food delivery rivals such as Just Eat, Deliveroo and Uber Eats.