Focused Pizza Chains Faring Better

CHICAGO - Despite flat sales in 2008 and into 2009 throughout most of the limited-service pizza industry, some chain operators are finding success through a strategy of focusing on a unique market position says Technomic, a food service research firm. The Top 100 pizza chains had U.S. sales of $18.8 billion in 2008, up 2 percent over 2007. That compares with only 0.4 percent growth for the total limited-service pizza industry that saw gross sales of $29 billion.

“Most successful pizza chains have staked out highly-defined market positions that allow them to stand out from the pack,” says Darren Tristano, EVP at Technomic. “The key to growth in the slow economy will be differentiation. Top players will have to understand the competition, successfully identify emerging trends, and find and execute a strong position in the market.”

According to a report released in September from Technomic, some chains that stand out are:

   •    Value: Little Caesar’s $5 Hot-N-Ready
   •    Healthy: Pizza Fusion, “Fresh, Organic and Earth Friendly”
   •    Complimentary catering: Pizza Hut’s Pasta to Go
   •    Take N’ Bake: Papa Murphy’s Take N’ Bake Pizza; Homemade Pizza Company
   •    Quality product/experience: ZPizza; RedBrick Pizza
   •    Ethnic consumer focus: Pizza Patron’s Pizza for Pesos
   •    All-you-can-eat buffet: Cici’s Pizza

The three largest pizza chains were Pizza Hut, Domino's and Papa John's. Pizza Hut led the top 100 chains with $5.3 billion in U.S. sales in 2008, up 3.9 percent over 2007. It also registered unit growth of 1.3 percent. Papa John’s grew sales by slightly more than 3 percent, while Domino’s netted a decrease in sales of almost 5 percent in 2008.