In 2020, pizza was rare slice of good news for restaurants
For many Americans, pizza has been a perfect pandemic option, a comfort food for a time that is anything but comfortable.
Whether a thin-crust version topped with fresh vegetables or a stuffed-crust pie piled high with sausage and pepperoni, pizza has checked many boxes during these strange times, primarily because it travels well and can easily feed — sometimes fairly inexpensively — an entire family.
Over the first nine months of 2020, the combined revenue of Domino’s and Papa John’s grew so much that it was roughly equivalent to their selling about 30 million more large cheese pizzas than they had the year before.
In a year when restaurants across the country have struggled to stay afloat, with many unable to cover rent payments and pay employees because of government-mandated shutdowns, those that dished up pizza have generally fared better. Sales of pizza grew as much as 4% last year, according to Technomic, a food industry research and consulting firm. Pizza and chicken are the only foods categories expected to have grown.
“The pizza category as a whole was a big winner,” said Sara Senatore, an analyst who covers restaurants at Bernstein.
Senatore noted that it may have become a go-to meal for families that found themselves on a tight budget because of falling wages or lost jobs.
For large pizza chains like Domino’s, Pizza Hut, Papa John’s and the privately held Little Caesars, the pandemic proved to be a sales boon. The four controlled 43% of the $44 billion U.S. market heading into the pandemic, according to Technomic.
Some analysts say the big chains, most of which have not reported fourth-quarter earnings yet, almost assuredly gained market share because their size allowed them to better navigate issues like rising prices for cheese and other ingredients, hiring additional help or covering rent after particularly lean weeks.
For the first nine months of last year, combined revenues at Domino’s and Papa John’s increased almost 12%, or $434 million. Pizza Hut’s revenues for the same period were down a tad from 2019’s levels. The chain was in the midst of a turnaround plan when it had to deal with COVID-related closings and restrictions at its dine-in restaurants. Even frozen pizza performed, with sales climbing nearly 21% to more than $6 billion, according to NielsenIQ.
Still, as demand soared during the pandemic, Domino’s rushed to hire 30,000 people; ramped up its production of the dough that is sent to all of its locations; and faced occasional shortages of ingredients as meat producers shut down because of coronavirus outbreaks in their facilities. Television commercials, which normally take months to plan and shoot, were reshot in a matter of days so they could feature drivers wearing masks as they made deliveries.