Domino's Now Serving Pan Pizza: Should Pizza Hut Be Worried?


Let the deep-dish pizza wars begin.

Domino's (DPZ), seeking to grab a slice of Pizza Hut's (YUM) customer base, rolled out pan pizza at nearly 5,000 U.S. stores Monday.

Nonetheless, the nation's biggest pizza joint isn't fretting over the No. 2 player taking an oversized bite out of its business.

"We've been the world leader in pan pizza for 30 years," Kurt Kane, chief marketing officer of the quick-service-restaurant known for its thick-crusted pies, told USA Today. "I'm not terribly worried."

Maybe he should be, even if just a little.

Domino's has been outshining competitors Pizza Hut and Papa John's (PZZA) of late with upscale menu items like "artisan" pizzas such as a spinach-and-feta pie, and parmesan bread bites. Those menu additions have hit the spot with new customers while commanding higher prices, says Steve West, director and senior restaurant analyst with ITG Investment Research.

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"Among the big three pizza players [Domino's, Papa John's and Pizza Hut,] Domino's stands out as being successful in passing higher prices on to consumers, primarily through new product innovation and upgrades and innovation," West said, in the report.

Indeed, Domino's is among the quick-service chains ranging from Burger King (BKW) to Starbucks (SBUX) that have been playing up what they call "premium" menu items in recent years.

Domino's started to turn a corner in 2010 when it reformulated its pizza recipe, publicly conceding that its signature hand-tossed pizza was in need of a taste makeover, Ron Paul, president and CEO of Technomic, a food-service consulting firm, tells DailyFinance.

Since then, "They've been doing quite well [as there's been] a focus on better product," Paul said, but also pointed out that Pizza Hut outperformed Domino's in the most recent quarter.


A Tastier Slice, Uh ... Wedge?

For its part, Domino's now says it's taking pan pizza to new heights taste wise.

"There is a standard out there for pan pizza that we realized could be better," Patrick Doyle, Domino's Pizza president and chief executive officer, said in a statement.

"The reason most people buy a pan pizza is for the crust, and that key component should be fresh, never frozen."'

To that end, Domino's pan pizza will feature a crispy, golden crust with a buttery flavor – "and most importantly, handmade from fresh, never-frozen dough," according to a press release.

Domino's expansion into the pan pizza business is well-timed as the country enters football season, when pizza consumption takes off, Paul notes.

Overall, "it's going to lead to more national acceptance and demand for pan dish pizza," he says.