QSR Interview | By Sherri Daye Scott
Domino’s already has a significant presence overseas. Is it likely we will see the same type of “pizza wars” played out abroad?
We intend to compete vigorously abroad, just as we do in the U.S. Competition makes us all better and, at the end of the day, benefits the consumer. We think there is plenty of room for international growth for competing U.S. pizza brands. I do think we will see competition evolve overseas in some unique ways as dictated by local cultural and business practices.
Where does Papa John’s fall in the price scale as compared to the other big pizza brands?
We probably aren’t perceived as the lowest price. We’re trying to give a quality pizza for a good price, not an exceptionally low price. One of the things we and our franchisees are trying is to avoid discounting that has been prevalent in this sector for a number of years.
Describe your relationship with your franchisees.
I’m a bit of a communications freak (and you can write that). There was an article written about me when I was at Blockbuster 11 years ago. Communication was one of the things I talked a lot about then.
I believe you need to communicate to your employees, to Wall Street, to the press, but particularly to your franchisees.
We’re using technology as much as we can. A good example is an event where we went live at Coke’s headquarters in Atlanta and had it distributed to 32 theatres across the country. We had all our franchise restaurant managers attend. It was a great event. We got the spirit of being in one place—for a cheaper price—and I think it is so important to communicate directly to restaurant managers because it cuts out all the layers that makes communication difficult. Direct communication to the people who really matter—restaurant managers—is what we’re trying to do.
In addition to that, I have worked very hard with the franchise advisory council. I think we’re building a strong embryonic relationship. That’s very important because our system is 78 percent franchised. I will continue to work on that relationship.
Word on the street has it that Papa John’s is looking at building its lunch business and creating a breakfast menu. What can you tell us about those two initiatives?
When I came in, I set a goal of developing an 18-month product pipeline. Core to this was providing our customers with variety and maintaining our strong product advantage in the sector. Pizza is a very versatile product that can satisfy many customer needs, including for both lunch and breakfast, so I do think there is opportunity for daypart expansion in our business. We are testing breakfast pizza in a small number of restaurants, but it is still very early days in our test.
Pizza Hut is clearly number one in the American pizza delivery business. How do you plan to go about catching them?
We do not have to catch Pizza Hut to be successful. As we like to say, the numbers in the restaurant are more important than the number of restaurants, so we will keep our focus on ensuring we have profitable growth and not just growth for growth’s sake. What we intend to do is to grow our business by continuing to do what we do best: deliver a superior-quality pizza with world-class customer service.
At the same time, we will also look for ways to innovate menu variety, to keep customers interested, and, hopefully, inspire them to order even more frequently, and to give our customers additional propositions so they feel good about the value equation. We also believe online is a major opportunity for us, and by building that, we will in turn build our delivery business.
How is the online ordering initiative going? Who is using the service?
Online sales are terrific. Sales are up 50 percent over last year. Customers who have tried it really love the service. Our research shows customers like seeing all of the pizzas and side items that we offer, and they like being able to order at their own pace.
Papa John’s is the only national pizza chain with online ordering available from all of its restaurants. Because we have a single platform POS system at all our restaurants, it allows online orders to be processed fast and accurately.
We are finding an increasingly wide variety of customers using our online ordering system. While the frequent Papa John’s online customer is likely to be male and just a little bit younger than our traditional customer, we still have a large percentage of female customers (over 45 percent), and a good number are over the age of 35 (more than 50 percent). More than 45 percent of online customers have kids in the household, and they’re frequent pizza customers—almost 40 percent order one or more times per week.
We pay a lot of attention to what our online customers ask, and are adding some things that they really want—like plan-ahead ordering so that customers can order days or even weeks ahead of time and have their hot, fresh Papa John’s pizzas and sides delivered on the day and time they want. We have also recently implemented a “repeat last order” function to our system, allowing customers to enter their last order with just a few keystrokes.
- What does it mean to own “the quality position”?
- Any sense of how food costs at Papa John’s compare to those at the other major pizza chains?
- How important is international expansion to Papa John’s future growth strategy and why?
- Will international growth be focused on developing existing markets or moving into new ones?
- Which is more important to the pizza delivery customer: price, speed of service, or quality of product?
- What, in your opinion, is going to be the next big thing in pizza and why?
- What lessons learned at Blockbuster and Burger King have you been able to apply to Papa John’s and how?