Who Is Winning the Digital Pizza Battle?
It's been a long day, no one has the energy to cook, and the entire family is too tired to go out. Who wants to deal with rush-hour traffic anyway? There's only one logical solution in this scenario: order pizza. Even if you don't fit into the pizza-ordering category, you must recognize the extreme demand. All three of the following companies have seen top-line growth over the past five years: Yum! Brands , Domino's Pizza , and Papa John's International . In addition to Pizza Hut, Yum! Brands also owns Kentucky Fried Chicken and Taco Bell, so keep that in mind. However, the focus for Yum! Brands will be on Pizza Hut from this point forward. All three of these companies are trying to one-up the others in the digital world, always trying to offer more convenience and value than each other. Let's take a look at some recent moves, as well as which of these three companies seems to be winning the digital pizza battle.
Pizza Hut's need for speed
If you like to save time, then you might enjoy ordering with Pizza Hut. Through a new mobile ordering website and apps, you can now order a pizza in 30 seconds or less. Pizza Hut accomplished this feat by partnering with some of the most talented mobile designers and developers in the world. The idea was to simplify the ordering process, and it seems to be a success.
However, Pizza Hut is a little behind its peers when it comes to reordering. This pertains to your favorite order being saved so the next time you visit the website or an app you can press a few buttons and complete your order. The good news is that this feature is expected to be available soon, and it's going to offer customers the fastest reorder speed in the industry at 10 seconds.
Another feature will soon be added: push notification. Through this feature, you will know when your order is on its way. This is an addition to apps receiving updated promotional messages.
PizzaHut.com traffic rankings (according to Alexa.com):
- Global: 4,074
- United States: 821
Domino's makes it easy to order
Domino's launched Pizza Profiles back in September. By customizing your profile based on favorites and recent orders, you can reorder in 30 seconds or less with Easy Order. When you customize your profile, you will also have an opportunity to save your address and payment information.
In order to spread the word about this new offering, Domino's is awarding $10 gift cards to those who create a profile and place an order before December 1, 2013. But don't go rushing to place an order just yet, because this promotion is limited to 100 orders per day.
Dominos.com traffic rankings:
- Global: 3,383
- United States: 658
Papa John's looks to the future
Like its peers, Papa John's allows customers to save their "Faves" and customize orders for convenience and speed. You can save up to four orders per day for up to 90 days. What stands out for Papa John's is Future Ordering. With this feature, you can submit an order up to 21 days in advance if you're paying with cash. If you're paying with a credit card, you can save an order up to three days in advance. You can also choose a time for delivery so you don't have to worry if you're planning a special event.
PapaJohns.com traffic rankings:
- Global: 3,609
- United States: 697
Fun with charts and numbers
This will be kept simple. First, take a look at the five-year comparisons for revenue:
In addition to having a slight lead in traffic rankings, Domino's maintains a slight lead for top-line growth. The recent decline in Yum! Brands' revenue has nothing to do with Pizza Hut. It relates to a chicken-quality issue and the Avian flu, both recent events taking place in China. Yum! Brands should bounce back on the top line.
If we're looking at operations that are solely based on pizza, which excludes Yum! Brands, then Domino's sports a higher profit margin of 7.66% than Papa John's at 4.78%. They're similar in dividend yield, with Domino's yielding 1.20% and Papa John's yielding 1.30%. If we throw Yum! Brands into the mix -- including Kentucky Fried Chicken and Taco Bell -- then it's the most impressive for profit margin, 8.48%, and yield, 2.20%.
The bottom line
All three companies are performing well. If you want to invest in the fastest-growing pizza company with the largest online presence while collecting a decent yield, consider Domino's. If you would prefer more diversification, which leads to more resiliency to weak economies and bear markets, consider Yum! Brands. That 2.20% yield is also enticing. As far as Papa John's goes, it's a good company, but it falls a little short of its peers for growth and yield.
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The article Who Is Winning the Digital Pizza Battle? originally appeared on Fool.com.Dan Moskowitz has no position in any stocks mentioned. The Motley Fool owns shares of Papa John's International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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