Although pizza has enjoyed enduring popularity among many, its dominance in the realm of food preferences has faced challenges due to the rise of competing options and evolving consumer preferences.
As per insights shared by Karan Taurani, Senior Vice President-Research Analyst at Elara Capital, the pizza industry is currently contending with formidable competition, and its potential for growth may not be immediately discernible. When analyzing market share data spanning the past 3-4 years, it becomes evident that the pizza sector has relinquished its market share within the larger quick-service restaurant (QSR) chain industry. Consequently, platforms like Zomato seem poised for a favorable trajectory in the foreseeable future, especially as they capitalize on the burger and fried chicken segments.
“If you look at the market share numbers over the last 3-4 years, pizza has lost market share as a category within the overall QSR chain. So, it’s a win-win for burger, fried chicken for aggregators like Zomato, over the near to medium-term,” said Taurani.
A significant strategic adjustment highlighted by Taurani involves Jubilant Foodworks’ shift towards emphasizing dine-in experiences. Historically renowned for its pizza delivery services, Jubilant Food, the operator of Domino’s Pizza in India, has acknowledged the necessity of adapting to changing market dynamics. Taurani’s insights indicate that the delivery sector might not be encountering the same levels of growth as before, given the fierce competition. Consequently, Jubilant Food’s strategic pivot towards dine-in services mirrors a response to evolving consumer preferences and the exploration of fresh avenues for expansion.
The evolution occurring within Jubilant Food is in sync with overarching trends in the industry, where pizza chains are expanding their menus and innovatively connecting with their customer base. The capacity to adjust and offer a range of dining experiences is gaining heightened significance for pizza chains in order to stay pertinent within this fiercely competitive environment.
“Our strategy of customer first and technology forward has started to yield positive results. ADS for mature stores grew by 2.7 percent sequentially, a decline in ticket size was arrested, app installs and loyalty enrolments reached a new peak, and we executed efficiently to expand EBITDA margin by 97 bps versus the previous quarter. I remain confident in our strategies and the organization’s ability to overcome the slower growth phase and emerge stronger out of it,” said Sameer Khetarpal, CEO and MD of Jubilant FoodWorks, post the results for quarter one of FY24.
The company launched 30 new outlets in India, expanding its network to a total of 1,891 stores encompassing all of its brands. Specifically, Domino’s India welcomed 23 new stores and ventured into a new city, increasing its network presence to 1,838 stores spanning 394 cities.
The company opened four new Popeyes restaurants and ventured into two new cities, Manipal and Coimbatore, expanding the network to encompass 17 restaurants spread across four cities.
The decrease in pizza’s market share, combined with the heightened competition within the category, highlights the imperative for pizza chains to consistently innovate and adjust to evolving consumer tastes. Jubilant Food’s move towards prioritizing dine-in experiences exemplifies how businesses in the industry are reassessing their strategies to succeed in this changing market landscape.