When the Soviet Union fell, commentators declared that we now lived in a “unipolar” world with only one superpower.
Delivery pizza has had its unipolar moment recently, but that appears to be coming to an end as Papa Johns and Pizza Hut are getting back on their feet, challenging Domino’s.
Domino’s may not seem like a hot new brand. After all, the company launched in 1960. But in recent years, it has seen massive growth. Posting just under $2 billion in sales in 2014, the company rocketed to nearly $3.5 billion in 2018, representing a 72% increase. The company’s stock more than quadrupled from mid-2014 to mid-2019.
What was behind this explosion? The most significant cause was the collapse of its top competitors.
Papa John’s has been reeling from the loss of “Papa John” himself, founder and CEO John Schattner. Schattner left acrimoniously in mid-2018 after using the N-word in a conference call, and the whole fracas caused colleges and professional sports leagues to drop their partnerships with the company. Papa John’s was already seeing a slow increase in sales, from $1.6 billion in 2014 to $1.8 billion in 2017.
Pizza Hut, meanwhile, saw sales-per-store fall from 2012 through 2015.
The result was the unipolar moment in American pizza delivery.
Americans are fickle people, though, with fickle tastes. And Domino’s doesn’t taste good enough to dominate.
Papa John’s hired a new CEO, who has filled the hole left by the loss of an NFL partnership by bringing on Shaquille O’Neal as the face of the company. Papa Johns’ stock is up 35% on the year.
And there’s been delivery innovation, too. Papa John’s doesn’t employ its drivers anymore but instead outsources that to the mobile delivery app DoorDash.
Pizza Hut, likewise, has GrubHub deliver its pizzas, and after consolidating stores has seen its stock price rise.
The story is different at Domino’s. Sales growth is slowing, and the stock is down 8%.
Thus it is always with American capitalism and American tastes. Uneasy is the head that wears the crown.
