Papa John's International trying to buck trend of pizza chains succeeding via aggressive price promotions, focusing instead on milder deals, product consistency and customer loyalty
March 6, 2012
– Papa John’s International is trying to buck the trend of pizza chains succeeding via aggressive price promotions, focusing instead on milder deals, product consistency and customer loyalty, The Ad Age Group reported March 5.
Papa John’s competitors are well known for discounted options. Pizza Hut is currently promoting its $10 Dinner Box, consisting of one medium one-topping pizza, five breadsticks and 10 cinnamon sticks. Domino's Pizza, meanwhile, markets its new artisan pizzas for $7.99, while Little Caesars is known for offering $5 large carry-out pizzas.
Papa John's, though, has generally resisted drastic discounts and mostly relied on milder deals like its $11 large pizzas. The problems with heavy discounting, said David Hale, CEO of fast-food consultancy firm Good Eats, is that doing so cheapens the product and doesn’t build customer loyalty or consistency.
Whether Papa John's can continue to buck the discounting trend remains to be seen. The company’s North American same-store sales were up 1.7% in the fourth quarter and 3.4% for all of 2011. However, Domino's domestic same-store sales grew 6.8% during the fourth quarter and 3.5% for the year, while Pizza Hut had fourth-quarter U.S. same-store sales gains of 6%.
The primary source of this article is The Ad Age Group, Detroit, Michigan, on March 5, 2012.