The pizza business, looking for customers, takes on burger chains

by Emma

The pizza industry, facing challenges such as driver shortages and shifts in consumer demand towards third-party delivery, is making a strategic move towards capturing customers from the burger sector. This shift is exemplified by recent menu additions from Papa Johns and Pizza Hut, focusing on burger-inspired pizzas and sandwiches.

Papa Johns has reintroduced its Cheesy Burger Pizza, along with variations like the Cheesy Burger Papadia and Cheesy Burger Papa Bites. These offerings are aimed at appealing to the value-conscious consumer, leveraging the popularity of burgers in a market where quick-service restaurants are struggling to maintain foot traffic.

Pizza chains experienced a surge in demand during the pandemic when home-bound consumers turned to delivery options. However, growth rates have tapered off significantly since then. Sales at fast-food pizza chains grew by 6% and 7% in 2020 and 2021 respectively but slowed to under 2% in 2022 and 3% in 2023. The top five pizza chains, including Domino’s, Pizza Hut, and Papa Johns, saw their sales growth drop from over 9% in 2020 to just above 1% in 2022, despite moderate recovery to 3% in 2023.

The competition intensifies as pizza chains like Domino’s face challenges in maintaining same-store sales growth, a trend that was previously robust over the years. Meanwhile, Papa Johns and Pizza Hut are also grappling with declining momentum and have undergone management changes to address these issues.

The strategic focus on value is crucial for pizza chains amidst consumer concerns over rising prices in the fast-food sector. Pizza remains an attractive option due to its perceived affordability and ability to serve multiple people per order, making it a competitive alternative to costlier fast-food burger meals. This approach not only positions pizza chains against traditional burger outlets but also differentiates them in the context of third-party delivery, where added fees can significantly inflate the overall cost for consumers.

In conclusion, the pizza industry’s move towards burger-inspired offerings underscores its strategy to reclaim market share and appeal to price-sensitive consumers in a challenging economic landscape dominated by shifting consumer preferences and operational hurdles.

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