Caught in the midst of a high-tech race in digital ordering that Domino’s seems to be winning, both Pizza Hut and Papa John’s are pivoting in new directions with their brands, attempting to slow down Domino’s rise.
Domino’s posted a whopping 13-percent increase in domestic same-store sales growth for the third quarter of 2016, its most recent quarter reported. Papa John’s reported same-store sales growth of just 5.5 percent for the third quarter—plus it now faces a continuing struggle with Midwest regional player Little Caesar’s for the No. 3 position in all of American pizzaland.
Meanwhile No. 1 Pizza Hut last week posted a dismal 4-percent decline in same-store sales for the fourth quarter. While it has continued as a largely promotional brand known for changing up toppings, crusts and other details of its pies, the strategy hasn’t been effective.
Pizza Hut and Papa John’s can’t withstand such troubles without trying something new. And so Yum! Brands CEO Greg Creed has decreed that he’s going to amp up attention to delivery at Pizza Hut, which still is known mainly as a dine-in brand despite the fact that it does buzzing delivery business at most locations. More than half of its US locations have dining rooms that “are not ideally set up for delivery,” Yum! CFO David Gibbs told investors last week.
“We have to turn Pizza Hut as a delivery brand,” he told investors after reporting that Pizza Hut results were an overall drag on the parent company’s financial report. “We have to change the consumer’s perception.”
“We have a lot of work to do,” added Creed, regarding Pizza Hut. “We have to work on assets and technology. We’ve got to work on all the things that will make this a more relevant brand. And we’re doing that with the franchisees right now. We’ve got to get ourselves a long-term strategy.”
Creed added: “I believe … there’s growth in the category. Our competitors are demonstrating that and we need to work harder to get our fair share.”
For its part, Papa John’s launched a new brand platform on Super Bowl Sunday that highlighted what it believes sets it apart from Little Caesar’s, Pizza Hut and Domino’s: Its approach to people, both inside and outside the company. The new campaign includes several new ads, a landing page on PapaJohnsPizzaFamily.com, a redesigned box with a new logo, a new social campaign, and the debut of the Halftime Heroes program to recognize employees who “go above and beyond to embody Papa John’s core values,” the company said.
— Papa John's Pizza (@PapaJohns) February 8, 2017
“Gimmicks don’t make better pizza; our people and ingredients make better pizza,” Papa John’s CEO John Schnatter says in a new ad showing drones delivering pizza, a not-so-oblique attack on the various ways in which Domino’s is pushing the envelope on digital ordering and delivery, including experiments by its New Zealand franchisee with robot and drone delivery.
In explaining Papa John’s new approach, Robert Thompson, senior vice president of global marketing, told QSR.com that “the pizza family campaign is all about celebrating our most important ingredient: our people—from our trusted ingredient suppliers we’ve used since day one, to our pizza makers and delivery drivers, to the customers worldwide who love our pizza.”
Ultimately, Thompson added, the brand believes the new positioning “will really resonate with consumers … We are a pizza family. It will continue to build trust and preference with consumers, and set us apart from the competition.”