thependulumswings

Do you like pizza?  Of course you do.  Pizza is as American as hot dogs, apple pie, and Chevrolet.  Sales have been growing like a rising crust for nearly three decades as more companies found more ways to serve you a pie.  Except one.  Pizza Hut.

Pizza Hut has been the king of the biz.   It’s been the number one market share pizza company for decades.  Long live the king.  Below is how the American scoreboard tallied entering 2017.

1. Pizza Hut – $5.8 billion in total sales
2. Domino’s – $5.3 billion
3. Little Caesars Pizza – $3.7 billion
4. Papa John’s Pizza – $2.9 billion
5. Chuck E. Cheese’s – $885.2 million
6. Papa Murphy’s Take ‘N’ Bake Pizza – $884.8 million
7. California Pizza Kitchen – $657.4 million
8. Marco’s Pizza – $488.9 million
9. Cicis – $449.7 million
10. Round Table Pizza – $442.6 million

In 2017 that long reign ended.  Domino’s took over as the market share leader late in 2017.  Domino’s slice of the U.S. pie is now estimated at 14.2% to Pizza Hut’s 14.1%.

A quick 23 years ago, in 1995, Pizza Hut had 25% of the fast food pizza market, compared to Domino’s 11% and Papa John’s 2.2%.  

Regardless of the category those who see the need and introduce the category (as well as their products to service that need) usually maintain a stranglehold on the number one position.   Or, sometimes the category grows so much, they might be in a dogfight to keep it, but their sales are growing rapidly side by side others.  The Coca Cola Co. and Pepsi Co. fit that description.

But not Pizza Hut.  How they have allowed their dominate market share position to fall this far is worth an entire semester of a business graduate school’s attention.

Making a pizza from scratch is a lot like running a company.  A good dough forms a great crust as a base.  Pizza Hut thought they were in the retail store pizza business.  Domino’s decided that they could advertise nationally and deliver locally.  Papa John’s followed that recipe shortly thereafter.  Pizza Hut had stores coast to coast before the first Domino’s delivered.   So much for a great base.  Pizza Hut failed to realize that they were in the pizza business not the retail store business.  Consumers evolve.  A Pizza Hut pizza and a movie at the theater became Domino’s at your door and a flat screen TV in your den.

What toppings would you like?  These are the features and benefits of your brand.   For your toppings you might like fast delivery of a warm pizza that you can order from Al Gore’s internet at a great price.  Fast, warm, internet, and price.  Sounds simple doesn’t it?  Actually if you listen carefully to consumers, it is.

Marianne Radley took over as Pizza Hut’s Brand Manager position last year.   One of her comments follows.

“Some of the focus, she says, should be on improving the company’s use of data and consumer insights, and how it interacts with patrons. “We’re a company that’s stuck in a transaction mindset, and we need to pivot to a customer lifetime mindset,” says Radley.

Another approach that may please consumers is finding their favorite brand/style of pizza in the frozen food section of their grocery store.  But, there is no Hut inside the freezer either.  Whataburger, a burgeoning retail store hamburger chain based in Texas, has their brand name mustard, spicy mayo, ketchup, and frozen fries in a large grocery chain that trades in similar markets.  Why not?  It’s but one example of extending your reach.  PF. Chang’s has frozen meals in there as well.  There are many others.

And finally, and quite importantly, there is who you are in the eyes of your customer or your potential consumer.  Ms. Radley lays out the multiple missteps of the brand’s marketing in this Ad Age article quite well.  In it she states that Pizza Hut is actively looking for their sixth agency in about a dozen years.

She also wants to keep the current tag line, “No One Out Pizzas The Hut.”  There is just one problem.  Currently everyone does.