Domino’s Set to Usurp Pizza Hut as No. 1 Pizza Chain This Year, Industry Analyst Says
Pizza Hut U.S. portrayed as a weak link in the Yum! Brands portfolio in CEO’s statement.
Online ordering has fueled a surge in sales at Domino’s, which could soon strip away Pizza Hut’s long-held title as the top pizza chain in the country.
Pizza Hut is still the no. 1 pizza chain in the country, but it’s becoming a weak link in the chain for parent company Yum! Brands, according to Nation’s Restaurant News.
NRN reports that Pizza Hut reported $5.8 billion in U.S. sales in the Latest Year, a drop of 0.9% from the previous year. Domino’s, meanwhile, came in a close second with $5.3 billion, up almost 11% from the previous year, and “is on track to take the pizza segment’s top spot in the near future,” according to NRN.
Yum! Brands reported overall growth, according to a statement by its CEO, Greg Creed, but Pizza Hut wasn’t driving it. “Our strategic transformation of Yum! Brands is already well underway, helping us deliver a solid start to 2017, with core operating profit growth of 9% in the first quarter,” Creed said. “This growth was led by Taco Bell’s impressive same-store sales growth of 8% and double-digit core operating profit growth at KFC, partially offset by weakness at Pizza Hut U.S.”
NRN notes that Mark Kalinowski, a restaurant industry analyst for Nomura, predicts Domino’s will claim Pizza Hut’s long-held No. 1 spot this year. “In January, Domino’s revealed that earlier this decade, it had set an internal goal of overtaking Pizza Hut as the No. 1 pizza chain in terms of market share,” Kalinowski said in a May report. “We forecast that this transition will happen in the U.S. during 2017, with confirmation of the changeover likely by the end of springtime 2018. Such a change marks the end of a radical transformation in the U.S. limited-service pizza sector, where Pizza Hut has reigned supreme for decades.”
Online ordering and a solid loyalty program have played a huge role in Domino’s own radical transformation. As customers favor convenience over everything else, Domino’s has developed at least 10 different ways to order pizza online, from tweeting a pizza emoji to a no-click smartphone app that automatically places an order when it’s opened.