Web Ordering Option Gives Pizza Chains a Competitive Edge

Market share for pizza restaurants is growing for those who offer digital ordering.

February 11, 2014

NEW YORK – As large pizza chains add online ordering options for their customers, the fortunes of neighborhood pizzerias are dropping, the Wall Street Journal reports.

Domino’s Pizza, Papa John’s and Pizza Hut all now derive 40% or more of their sales from digital orders, the companies said. For mom-and-pop pizzeria Geraci’s Restaurant in University Heights, Ohio, which doesn’t offer online ordering, it’s difficult to remain competitive.

Frannie Geraci, co-owner of Geraci's, said her company’s sales have dropped 20% in the past two years as chain pizza shops have moved into the neighborhood. She said she could increase sales by 30% if she offered delivery and online ordering, but she said she can’t afford the cost.

“I know I've lost younger customers," said Geraci, whose parents opened the restaurant 58 years ago.

Large pizza chains accounted for 52% of pizza orders at quick-service pizzerias last year, up from 47% in 2009. During that same period, sales at independent pizza restaurants fell from 31.5% to 29%, according to NPD Group.

Pizzeria owners and pizza company executives said digital ordering is definitely having an impact on those shifts.

According to Domino's CEO Patrick Doyle, digital ordering "has been a big part of" the growing market share of big chains in the past few years.

"Most of the small and regional chains who still continue to sell the majority of the pizza in the U.S. simply aren't able to play on these technology platforms with the level of sophistication that we have," he said.

For small companies unable to afford a dedicated online ordering presence, GrubHub and Seamless, which takes a cut of online sales, helps bridge the gap.

David Rizzo, owner of three Rizzo's Fine Pizza shops in New York, began taking orders via GrubHub and Seamless about 18 months ago.

"If I didn't do delivery and online ordering, we'd be in serious trouble." he said.

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