Domino's trials Chick 'n' Dip fried chicken in UK as shares hit decade low

Domino's Pizza Group said it will trial a new fried chicken sub-brand, Chick 'n' Dip, in 187 stores in the northwest of England and Northern Ireland as it seeks to arrest sliding sales and restore investor confidence.

The London-listed UK master franchise said the new offer — featuring chicken tenders, wings and boneless bites served with a choice of nine dips "inspired by flavours from around the world" — will be delivered through its existing supply chain and kitchens with "minimal capital investment." The group has seen its market value fall by about a third this year, with shares trading near a 10-year low.

"Chick 'n' Dip is a bold new chapter for Domino's," Chief Executive Andrew Rennie said, describing the move as a "significant opportunity for our UK & Ireland business." The company said the trial will precede a national roll-out if initial results meet expectations.

Domino's shares were down about 0.6% in early trading at roughly 208.8 pence, levels the group has not seen since 2015. The company said it will provide a third-quarter trading update in early November and will host an investor event on Dec. 9 to outline plans for its loyalty scheme, digital progress, store openings and other strategic priorities.

The launch follows pressure from some shareholders. Former director and shareholder Usman Nabi this month urged the company in an open letter to expand a recently announced share buyback programme and to abandon any takeover plans. The group last week disclosed a £20 million share buyback.

Analysts said the chicken sub-brand is consistent with management's broader search for growth avenues. Shore Capital noted that Domino's has explored acquiring a second brand separate from its pizza business and had previously been linked to talks over Wingstop, which was later bought by private equity for about £400 million.

"Domino's has been exploring new ways to scale the business, with talks of acquiring a second brand, separate from Domino's," Shore Capital wrote in a client note. The firm added that, while the stock looks "optically cheap," it maintained a hold rating because of concerns over ongoing consumer headwinds and lowered full-year forecasts.

Domino's said it designed Chick 'n' Dip to be compatible with its current kitchens and national suppliers to limit the need for additional capital expenditure. The move follows a period of weaker consumer demand and cost pressures that have weighed on the UK's casual dining and food delivery sectors.

Market commentators said the trial is intended to broaden Domino's menu and boost frequency among existing customers while attracting new demand. If successful, the sub-brand would put Domino's in direct competition with dedicated chicken chains and fast-food operators that have expanded chicken menus in recent years.

Investors will be watching take-up rates during the 187-store trial and any early sales impact reported in the November trading update. Management's December investor event is expected to provide further detail on how the company plans to integrate the chicken offer with its digital channels, loyalty incentives and store rollout strategy.

Domino's said the trial is part of a wider effort to "drive further growth for the core UK & Ireland Domino's business," a task it described as central to restoring shareholder confidence amid a challenging market backdrop.