Key Takeaways
• Pizza Hut has grown since becoming the NFL’s official pizza sponsor, with online sales up 9% since February.
• Domino’s is dominating online pizza sales, raking in 51% of the money earned since June compared to Pizza Hut and Papa John’s.
• However, Papa John’s saw the biggest bump on Halloween, with a 114% increase.
It was a controversial year for Papa John’s. In late February, the company ended its sponsorship of the NFL, following founder John Schnatter's claim that players' "taking a knee" during the anthem was hurting business, as well as floundering TV ratings. During the first week of July, it was revealed that Schnatter had used a racial slur during a conference call in May 2018. This ultimately led to his resignation as chairman of Papa John's. How did these events affect the chain and its competitors? To find out, Edison Trends took a look at the sales across each company.
Both Pizza Hut and Papa John’s saw a large increase from February into March; this was the case in 2017 as well. Papa John’s increase was larger in 2017, at 11%, versus 9% in 2018. Pizza Hut’s was larger in 2017 as well, at 9% versus 2018’s 7% increase. This means that both chains saw a smaller boost going into March this year than they did in 2017.
However, looking at a longer period, from February through the end of October, Pizza Hut has seen more growth. Their sales are 9% higher now than in February, while Papa John’s sales have declined 7%.
Figures 1a and 1b: Comparing monthly sales between Pizza Hut and Papa John’s during February - October, 2017 vs. 2018. Values are in relation to February 2017. For example, "1x" means "1x that vendor’s sales in February 2017."
During the first week of July, it became publicly known that John Schnatter, founder of Papa John's, used inappropriate and racially offensive language during a conference call. Ultimately, the widely-publicized backlash led to his resignation as chairman of Papa John's. Papa John’s share of online sales revenue dropped after the news was revealed, falling from 23% (among Domino’s, Pizza Hut and Papa John’s) in late June to 19% in early July.
Domino’s saw corresponding growth in their market share over the same period, growing five percentage points to 55%, and they remain far and away the top pizza chain with 51% share of sales since June among the three brands. Pizza Hut saw a slight decline over the period following the Schnatter scandal, but remains solidly in second place, with 30% market share since June.
While Papa John’s market share has since risen from that July low, they have yet to return to June levels.
Figure 2: Share of weekly sales across Domino’s, Pizza Hut, and Papa John’s during June 25 - September 3, 2018, according to Edison Trends.
All three pizza chains saw a sales increase during Halloween compared to their pre-Halloween average. Domino's saw a 46% increase, while Pizza Hut, which was offering a package deal including a Hershey's cookie, saw a 69% increase. But it was Papa John's, with their October special jack-o-lantern-shaped pizza, that saw the largest increase. They pulled in a whopping 114% over their previous average, and the jack-o-lantern pizza was the most popular item that day.
Figure 3: Increase in sales on Halloween versus each brand’s 2018 pre-Halloween Wednesday average, according to Edison Trends.
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*The data shown is based on a sample of anonymized and aggregated e-receipts from millions of consumers in the United States.