eBusiness Weekly
Pizza Hut opening soon as US company eyes Africa expansion
Chipo Sabeta
Us-based pizza and fast-food chain Pizza Hut is expected to open a new restaurant at Ster-Kinekor Sam Levy’s Village in Harare in a franchise deal owned by Silicoade Capital.
Pizza Hut has over 16 000 locations worldwide in 100 countries in the world including Botswana, South Africa, the United States, United Kingdom, Saudi Arabia and China. Ruzivo Chonyera, Silicoade Capital marketing consultant said Pizza Hut is set to open soon and will have a full offering on its menu.
“It’s official. Pizza Hut, a subsidiary of Yum! Brands is in town. It will serve innovative pizzas, traditional favourites like the signature Pan Pizza, and much more. We are committed to deliver an awesome pizza experience for pizza lovers nationwide,” she said.
“Take-outs and takeaway is where the industry is going. That is what we are aiming for.” It’s arrival is a big deal to local consumers, who get more options for their pizza and fast-food.
‘The Pizza Hut franchisee will compete with leading local brands Pizza Slice and Pizza Inn. However, for local companies, competition may mean a death sentence for those who do not up their game in terms of quality and service delivery.
Accustomed to dominant positions in protected markets, they suddenly face foreign rivals wielding a daunting array of advantages including substantial financial resources, advanced technology, superior products, powerful brands, and seasoned marketing and management skills.
Chonyera said: “Our thrust is on improving the overall customer experience. This starts with our restaurants. We will recruit top talent and train team members to perform at their absolute best.”
But elsewhere trends for Pizza Hut are worrying
According to a report by FranchiseTimes, by analyzing credit and debit card information for millions of US diners, 1010Data has a unique window on the country’s restaurant scene.
Its latest report brings some unsurprising, but certainly unpleasant news for Pizza Hut. The one-time leading pizza chain has seen its market share decline by 6 points over the last four years while Domino’s has grown by 8 points over the same period.
According to the report, the pizza category has remained relatively flat with just 1 percent sales growth year over year. In this stagnant environment, Domino’s has doubled down on its massive R&D spend.
In addition, it notes that Papa John’s surpassed Pizza Hut’s market share in early 2016, and has maintained the lead ever since.
Beyond market share, 1010Data asserts that Pizza Hut customers are spending less — an average of $4 less each month than customers at Domino’s or Papa John’s. Pizza Hut customers are also ordering less frequently than those of its competitors.
Most troubling for the brand, 1010Data says 38 percent of Pizza Hut customers who dined from November 2015 to October 2016 did not return in the following year.
“Instead, from November 2016- October 2016, 56 percent of them dined at Domino’s or Papa John’s,” the report said. “As a result, Pizza Hut lost 21 percent of its customers to their top competitors.”
Not good news at all for Pizza Hut, but perhaps their well publicized half-off new year sale will move the needle. When it comes to all this technology, including investments in customer convenience and loyalty, this case study shows the first-mover advantage paying off for Domino’s.
