The Journal Gazette
Friday, February 26, 2021 1:00 am

Pizza chains see slowing sales growth

DEE-ANN DURBIN | Associated Press

ANN ARBOR, Mich. – After a pandemic-fueled boom, U.S. pizza sales appear to be headed back to earth.

Domino's and Papa John's pizza chains both said Thursday their same-store sales lost steam in the fourth quarter compared to the huge increases they saw earlier in 2020. Same-store sales are expected to continue seeing percentage declines well into this year.

Pizza delivery remains popular, but diners' choices are expanding, with more restaurants now offering delivery. In a survey of 3,500 U.S. restaurant operators last fall, the National Restaurant Association found that 27% had added delivery from a third party such as DoorDash, while 17% had added in-house delivery. Pizza could also be pressured as the pandemic eases and dining rooms reopen.

“We aren't sure exactly what the new normal will look like,” Domino's CEO Ritch Allison said Thursday during a conference call with analysts.

Papa John's said its North American same-store sales – or sales at stores open at least a year – rose 13.5% in the fourth quarter, after skyrocketing more than 20% in both the second and third quarters.

For all of 2020, Papa John's same-store sales jumped 17.6% in North America. But they're only expected to be up 2% this year, according to analysts surveyed by FactSet.

Domino's said its same-store sales were up 11% in the October-to-December period. That was short of Wall Street's forecasts, and below the 17.5% growth the company saw in the third quarter and the 16% growth it saw in the second quarter.

For the full year, Domino's U.S. same-store sales were up 11.5%, well ahead of the 3.2% growth they saw in 2019. But this year, analysts expect they will rise just 1%.

Sign up for our daily headlines newsletter

Top headlines are sent daily