Retail

Pizza Is The Food Of The Pandemic

Pizza Is The Food Of The Pandemic

Pizza sales – and pizza-chain hiring – are both going through the roof during the pandemic.

First, No. 2 ranked-chain Domino’s (with 6,296 stores) said it was hiring back 10,000 workers when the pandemic started in March. And on Monday (July 27), No. 4 chain Papa John’s (3,003 stores) announced that it will match that number on top of the 30,000 jobs the company said it’s already added since March.

And although third-party delivery services for other foods have found new traction during the crisis, the old standby of having a pizza delivered has been the food staple of the pandemic. The evidence can be seen in both pizza chains’ hiring numbers and total sales.

Last week, Domino’s reported that U.S. comparable sales rose 16 percent for its fiscal second quarter that ended June 14, compared to just a 3 percent gain in the same 2019 period. “The second quarter marked a rather unprecedented acceleration for food delivery in the U.S., and we were certainly no exception,” Domino’s CEO Ritch Allison said on an investor call.

As for No. 1 chain Pizza Hut (6,296 stores), it’s a subsidiary of Yum Brands, which will report earnings on Wednesday (July 29). Pizza Hut hasn’t yet announced any new hirings, but that might be due to the company having to play catchup with home delivery (which not all locations offered before the pandemic). Reports put the chain’s comparable-store sales gains in the low teens in percentage terms during the latest quarter.

Why is pizza outperforming its culinary competition?

QSR magazine, which posits that America is entering the “golden age of pizza,” wrote recently that “the why isn’t complicated: Pizza brands came into the crisis, on a broad scale, already equipped to deliver and fulfill carryout service. No pivot needed. It was ingrained not just in their operations, either, but in core consumer behavior as well. The latter factor might just be the more critical, given the scale of restaurants catching up and the sales gap that still remains.”

The magazine noted that market tracker Datassential recently found that 63 percent of consumers have sought out pizza during the pandemic. By contrast, burgers and sandwiches came in second, but only at 51 percent.

Meanwhile, Pizza Magazine (yes, there’s a trade magazine for pizza) said that 83 percent of consumers already reported before the pandemic that they were eating pizza at least once per month. According to the magazine’s 2018 Industry Census, 60.4 percent of pizza restaurants also reported an increase in sales over the previous year.

Additionally, the magazine’s research shows that chains like Domino’s and Papa John’s are advancing against independents. On a macro level, pizza industry sales were up slightly in the 12 months that ended in September 2019, with sales totaling $46.3 billion. That’s about a 1.33 percent increase over the previous 12 months’ $45.7 billion.

More pizza stores also opened in 2019, with the industry totaling 77,724 units – up 1.34 percent over 2018. Independents still lead in total number of units nationwide, but that’s shrinking. The chains saw their units rise to 36,151 from 34,967 in 2018, while independents lost ground with 41,573 stores versus 42,026 a year earlier.

Pizzerias have also profited from the rise of Generation Z. Nick Salvagni, national marketing director for American Dining Creations, said digital nativism and the need for Gen Z to order and consume local and organic foods play right into the industry’s hands.

“Gen Z, unlike previous generations, truly understands the taste, texture and experience of true authenticity,” Salvagni said. “For example, if they prefer to order a Neapolitan pizza over a deep-dish or even a New York-style slice, they have an image of what that Neapolitan pizza should be like – not just because of what they saw on TV or experienced from chain retailers. Instead, it’s likely that they’re expecting the equivalent of the pizza they experienced in [Naples, Italy], where they took the time to visit the most sought-after pizza maker.”

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