Pizza Could Be Suffering Because It’s No Longer the Only Delivery Game in Town
An increase in delivery overall could slowly be cutting into pizza’s position as delivery king.
If you follow the food world, you’ve likely seen a familiar excuse this fall from restaurants trying to justify poor performance: NFL ratings. Sport-centric casual dining chains like Buffalo Wild Wings have suggested a decreased interest in football has hurt business. And just this week, Papa John’s blamed the NFL for stagnant pizza sales. Granted, a correlation between pizza and football has been shown in the past, but pizza may actually be suffering from another, far larger and more problematic long-term trend: more and more restaurants are getting into the delivery game.
Not that long ago, pizzerias in general – and the large pizza chains in particular – were one of the few place that pretty much guaranteed delivery, especially across a wide area and outside of major cities. Now, as Nation’s Restaurant News’ Jonathan Maze writes, that’s beginning to change, and the question becomes “whether overall demand for delivery is increasing, or whether the increasing use of third-party providers is taking some business away from the more established players” like the big pizza chains.
As Maze points out, companies like Papa John’s, Domino’s and Pizza Hut are already far ahead of their competitors in the delivery arena because they’ve been doing it for years, resulting in dedicated delivery drivers and the technology to support them. But during an earnings call today, Greg Creed, CEO of Yum! Brands, the parent company of Pizza Hut, was specifically asked about the growing delivery business overall. “Competition is heating up in this area,” he was forced to admit.
Interestingly, it was just this past July that Pizza Hut specifically renewed its commitment to delivery, saying the brand planned to significantly update its technology and hire 14,000 new drivers to keep delivery running as smoothly as possible. Delivery is clearly not just on Pizza Hut’s mind, but at the top of the company’s priority list.
But getting back to the question of whether more options are cutting into pizza’s previous delivery monopoly, you only have to ask yourself, “Have more delivery choices caused me to order something else when in the past I would have just settled for pizza?” The answer to that question is likely not-so-great news for places like Papa John’s… regardless of how football season is going.