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Papa Johns Sticks To Its Guns
By Investment U on June 24, 2009 | More Posts By Investment U | Author's Website
In an interesting footnote to the Pizza wars, Papa Johns (PZZA) has decided not to expand its offerings into pasta and non-core pizza items.
We approve of the move to focus on their primary offerings and concerns over keeping product quality up. That kind of management focus and discipline will equate to bottom line profits.
Number one and two competitors, Pizza Hut (YUM) and Dominoes (DPZ), are looking to broaden their offerings by adding pastas, chicken wings and sandwich items.
And that makes sense for a brand like Pizza Hut, which has lots of eat-in restaurants. It needs to expand its brand appeal and revamp a tired image.
On the other hand, Dominoes time and money might be better spent improving the advertising and public perception instead of straying from their core products. It reminds us of the same issues Subway struggled with.
Subway started trying to be all things to all customers - adding exotic sandwiches and a variety of options - and the biggest effect was that it started missing the mark on its core products. Only now is Subway starting to correct that and cut down its menu offerings.
Dominoes could learn a thing or two from Subway on improving their core products, or they might look across the street to Papa Johns. Papa John seems to have things well under control.
Symbols mentioned in this article: PZZA, YUM and DPZ.
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It’s Domino’s - not Dominoes
Just so you know.
I don’t think you really know what you’re talking about. Pizza Hut and Domino’s are the top two pizza industry’s out there. We live in a world of variety - and both Pizza Hut and Domino’s are doing very well with their other menu items. Obviously pizza is still their strong-point, but there isn’t any harm in making choices available. I have a feeling that sooner or later, Papa John’s will join on the variety bandwagon too - the pressure of the economy and the industry will force them to do so.