Pizza is new comfort food in pandemic, Domino's gets biggest bite

At the height of the pandemic, people seemed to have snacked heavily on the world’s most favourite fast food – the pizza. It has been earmarked as the “comfort food” of the pandemic.

In the first nine months of 2020, when the pandemic was raging across the world, when other restaurants were falling like ninepins in America, pizza chains Domino’s and Papa John were doing roaring business. Their combined revenue skyrocketed to the extent that it was roughly equivalent to both companies selling about 30 million more large cheese pizzas than they had the year before, said a report in News18.

Pizza sales recorded a 4 per cent growth last year, said the report quoting Technomic, a food industry research and consulting firm. Pizza and chicken were the only food categories that grew in the pandemic, said media reports.

Even as most pizza chains saw an uptick in sales, Domino’s had the biggest slice of the US market when the world entered the pandemic. According to Bloomberg Intelligence, last year Domino’s captured 19 per cent of total pizza sales in the US thanks to its dominance in delivery.

The Michigan-based company, which had invested heavily in technology, had introduced innovative contactless delivery systems like Carside (the delivery person would place the pizza in the trunk of the car) and Pizza Pedestal. The pedestal is a small cardboard foldout structure on which pizzas are placed to avoid contact with customers or potentially infected surfaces, said a Deccan Herald report.

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In Houston, the company was testing out an autonomous vehicle delivery system in partnership with Nuro, said a CNBC report in April this year.

As demand surged during the pandemic, Domino’s quickly hired 30,000 people; ramped up its production of dough though it faced challenges like lack of meat supplies during coronavirus outbreaks at meat production facilities. But the company persevered and even went to the extent of re-shooting their TV commercials to show drivers wearing masks during deliveries.

The Kentucky-based pizza chain Papa John’s too recorded a 28 per cent increase in sales at its North American restaurants in the second quarter of 2020, as compared with the year before, said a Fortune report. To cope with the demand the company had hired 20,000 additional employees between March and June and its shares started spiking by 55 per cent. This boom came during the pandemic after years of underperforming.

The penchant for pizza was not ignored by others in the restaurant industry which has been severely impacted by the pandemic. To cash in on this trend, many eateries started including pizzas in their menu.

But it was Domino’s that bagged the “biggest slice” of the US market. According to Bloomberg Intelligence, the company grabbed a 36 per cent share in US delivery sales in 2019, as compared to the combined total of 26 per cent of other major chains. While regional chains and independent restaurants had garnered 38 per cent, said the Fortune report.

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Domino’s generated $240 million in net income through the first half of 2020, a 30 per cent increase over last year, despite slower growth in international markets.

A more recent CNBC report stated that Domino’s reported results from the first quarter of 2021 showed that global retail sales were up 16.7 per cent from a year ago, while same-store sales in the US grew 13.4 per cent. The stock is up 8.48 per cent so far this year, added the report.

While experts don’t know how long the pandemic pizza boom will last, consumer behavior is expected to stay on course on these lines as people have adjusted to the new ease of ordering online and will stick to their new habits.

But Domino’s seemed to have hit the mark to meet the consumers’ increased demand for pepperoni-and-cheese–topped pizza – the comfort food of our troubled times.