26 Mar

Domino’s: The Second-Largest Pizza Chain in the World

WRITTEN BY Adam Jones FEATURED IN Company Overviews

Highly fragmented US pizza market

According to the report “Your Guide To Pizza, Pizza Market Place,” in 2013, there were 70,000 pizzerias in the US alone. Of these, 65% were independent, and 83% offered home delivery. So, Domino’s Pizza (SPZ) is up against some tough competition in this highly fragmented industry.

According to Statista, these were the five big US pizza chains in terms of sales in 2013:

  1. Pizza Hut
  2. Domino’s
  3. Little Caesers
  4. Papa John’s
  5. Papa Murphy’s

Domino’s: The Second-Largest Pizza Chain in the World

The second-largest pizza chain

Pizza Hut, under the umbrella of Yum! Brands (YUM), is the largest pizza chain in the US. In 2013, it had about 13,000 units and total global system sales of $5.7 billion.

In comparison, Domino’s (DPZ) had a total of 11,629 restaurant units, 5,076 of which were located in the US. Domino’s total system sales in 2013 were $3.8 billion.

Little Caesars, a privately held company, had sales of $3 billion. Papa John’s (PZZA) had sales of $2.5 billion, with a total of 4,663 restaurants units in its system.

Pizza chains performed better than fast food

On average, pizza chains such as Domino’s and Papa John’s had better same-store sales growth in 2014 than other fast food chains such as McDonald’s (MCD) and Wendy’s (WEN).

The Consumer Discretionary Select Sector SPDR Fund (XLY) invests about 4% of its portfolio in MCD.

A large portion of Domino’s sales come from pickup and delivery customers. But the company also offers a casual sit-in dining experience. These restaurants offer limited services and so require limited staffing and facilities.

Next in our series, we’ll look at Domino’s three business segments.

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