Pizza Wars are Heating up...

January 18, 2022

Pizza Wars are Heating up...

With a new year comes new resolutions. Every year, consumers around the world declare their intentions to shift directions and make a change.

But 2022 seems… different.

This year, people really aren’t even pretending to want to lose weight.

In fact, on a month-over-month basis – we’ve seen more growth in people talking about ordering pizza than about going on a diet!

Even more surprising has been the shift in consumer preferences for their pizza.
Generally, when we’ve looked at this comparison, Dominos (DPZ) has found itself squarely on top in terms of consumer happiness against its two primary rivals, Pizza Hut and Papa John’s (PZZA).

Pizza Hut, owned by Yum! Brands (YUM) now has the highest overall consumer happiness of the pizza brands, by a sizable margin.
This kind of happiness shift in a fickle industry like Pizza can be a significant leading indicator of future shifts in market share.
A more pressing issue for the entire industry is rising food costs.
Domino’s CEO Richard Allison says that costs are soaring by as much as 10% year over year, which is 300% more than average.
This cost squeeze has gotten so bad that Little Ceasars was forced to pass through the increases to consumers by raising the price of their famous Hot n’ Ready pizzas from $5 to $5.55 – the first such move in the company's history.
As costs soar higher… companies are left with only a few options: Raise prices, accept lower profits, or reduce the quality and cost of ingredients. While none of those choices sound great, it will be interesting to see which company can come out of this environment with the happiest customer base.

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