VANCOUVER Wash. The list of winners during this downtime is short, yet, as consumers continue to cut back on their dining out dollars the largest player in the take-and-bake pizza category is seeing sales skyrocket.
Papa Murphy’s International Inc., the franchisor of more than 1,100 take-and-bake pizza locations, said its 2008 U.S. systemwide sales totaled $585 million, a 17-percent increase from the year earlier. The jump reflected 102 new store openings and an annual same-store sales increase of 8.5 percent, the company said earlier this week.
The rapid expansion for the 98-percent franchised chain is in stark contrast to most restaurant brands that have reported slowed sales and reduced unit openings in 2008.
“Our brand has found its sweet spot in this economy,” said Clarice Turner, president and chief operating officer. “Papa Murphy’s is a high-value, quality-oriented solution for families who are evaluating their out-of-home dining purchases.”
The largest pizza delivery chains have struggled most recently, especially against higher food costs and lower numbers of customer visits. Domino’s Pizza most recent U.S. same-store sales result, for its third quarter, fell 6.1 percent. Papa John’s posted a 1.7 percent domestic same-store sales increase for its latest quarter. Yum! Brands said same-store sales at Pizza Hut were most recently positive, but did not disclose a figure.
The take-and-bake market differs from pizza delivery in that customers order and take out a custom pizza pie that is then cooked at home. Some industry sources say the category competes head-to-head with supermarket chains rather than restaurants, although all agree that it is the share of a customer’s dining dollar that counts. Research has shown that consumers are spending more for take-home meals and less on dining out during this recession, which has helped take-and-bake and supermarket sales.
At a recent restaurant industry conference in New York, a veteran operator who asked not to be identified said that supermarkets and take-home-focused chains, like Papa Murphy’s, are the largest threat to restaurants right now.
“They are tops when it comes to convenience and choice,” he said. “The better they do, the more challenging it is for us.”
Contact Sarah E. Lockyer at [email protected].