• To compete against major pizza chains, smaller operators should offer “a unique promise and positioning strategy that will resonate with consumers,” a report by Aaron Allen & Associates states.
  • Guest-centered success starts with “defining a brand’s purpose and promise and ensuring every touchpoint of service goes back to that purpose.”

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If independent pizzerias, small pizza chains and emerging pizza concepts want to survive in an industry increasingly dominated by the big chains and a global economy controlled by the wealthy, they’ll have to embrace technology while developing a “guest-centered” philosophy and strategy that will make them stand out in a crowded field.

As PMQ reported in its April 2022 cover story, top chains like Domino’s, Papa John’s and Little Caesars, along with smaller chains like Blaze Pizza, Hungry Howie’s and Marco’s, have been gearing up for explosive growth in the U.S., despite a mature and saturated market. That story emphasized the “hidden superpowers” that independent pizzeria and small chain operators must flex to remain competitive. (Click the link below to read the story.)

Related: Tap into your hidden superpowers to compete with the big chains

A November 2018 report from Aaron Allen & Associates, a restaurant consulting firm, underscored the challenges that independents face. The report’s findings have proven correct, as newer fast-casual concepts like Blaze Pizza continue to attract investors and top chains keep opening new stores. “Those in the most danger will be the independent pizzerias not keeping up with modern technology as well as chains not offering anything unique enough to distinguish them from the pack,” the Aaron Allen report stated.

Little Caesars’ self-serve kiosks meet customer demand for convenient pick-up.

The report was issued several years before the pandemic, but it accurately predicted disruption of the overall foodservice industry—beyond pizza delivery—by third-party delivery platforms like DoorDash and Uber Eats. Thanks to those companies, other restaurant segments have now achieved some success in the delivery market, offering consumers more at-home dining options, a change that accelerated during the pandemic.

“As delivery expands and more convenient options become ubiquitous, innovation will continue to take a toll on low-tech operators,” the Aaron Allen report asserted.

Related: Is third-party delivery right for your pizzeria?

It noted that private equity firms with deep pockets will keep powering the growth of pizza chains, including the older ones, and muscling independent pizzeria operators and entrepreneurs aside. “Through the proper investment (plus help from a seasoned expert), firms can provide the necessary capital and management insights required to reimagine a future for an older brand and seed relevance within the increasingly competitive pizza category.”

In other words, the major industry-leading chains will keep finding new ways to refresh their brands and maintain top-of-mind awareness. Meanwhile, “independent operators that fail to differentiate their brand (product, packaging, positioning, value proposition and so on) will be forced to close or suffer painfully thin profit margins. Chains will continue to cannibalize independents in the foreseeable future.”

But all is not lost. “Guest-centered innovation” is the key to future success for smaller pizzerias, the report concluded. It all comes down to what Aaron Allen & Associates call “convenience engineering.”

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“This should first be guest-centered, but it should also ripple out to all essential constituencies (employees, investors, members of the media, and more) as well as the modernization of the internal systems and infrastructure that move the most important commercial levers within the business.”

Pizza companies must offer something new, “a unique promise and positioning strategy that will resonate with consumers. Chains that can bake that unique promise into their pies and top it off with all of the non-negotiables (convenience, service) will be rewarded with a larger slice of share.”

“For still-burgeoning concepts, success will start with defining a brand’s purpose and promise and ensuring every touchpoint of service goes back to that purpose,” the report states. “Startups will be forced to confront a hard truth: Do they offer something that would put them among the top pizza news nationally and [that] a journalist would consider newsworthy? Even the most brilliant concept can fail, particularly if it tries to solve a problem that doesn’t exist, and lose simple truths of hospitality along the way.”