Papa John's has a strategy to defeat Domino's and Pizza Hut

Papa John's has a strategy to defeat Domino's and Pizza Hut ...

If there''s one word that acts as a buyer draw-in and as a way to claim your product is superior, it''s "premium." Brands will use it to refer to anything from a flight upgrade and car rental tiers to a pizza sometimes, it is a method to lower a price on a product with only a minor difference from the non-premium version.

"Defining what a premium brand is can be difficult," writes Brand Strategist Chris Fulner. "Each individual has their own choice of "premium."

Get Papa John''s International, Inc. Reportis one fast-food chain that is labeled "premium." During its latest earnings call,CEO Rob Lynch said that launching a variety of specialty products has helped the chain detonate consumers with pizzas that give them more than they could get for the cheapest option.

When talking to pizza lovers, it is almost always a result of more cheese.

What''''s ''''Premium'''' About These Pizzas?

Back in 2021, the Louisville-based pizza company launched a number of what it called premium pizzas: theEpic Stuffed Crust and theEpic Pepperoni Stuffed Crust. (Epic is another word that can be used to mean anything a company wants it to).

Papa John''s opened its doors to specialty items and charged more than what it costs to get the average pie, including $13 for cheese and $14 for cheese-and-pepperoni.

"These are premium goods that were promoting, and they are a very different model than some of our competitors, who offer the absolute lowest price point that they can, and tie advertising to those low price points," Lynch said in an interview with QSR.

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Papa John''s reported a revenue increase of 6% to $5422.7 million during the quarter ending March 27. It also announced plans to expand to around 300 new eateries in 2022 and expand to Asia with 1,350 locations in China by 2040.

Papa John''s is one of the country''s largest pizza chains to report a positive sales quarter. Yum! Brands (YUM) - Get Yum! Brands, Inc. Report-owned Pizza Hut and Domino''s (DPZ) - Get Domino''s Pizza, Inc. reported their sales down a respective6% and a 3.6%.

The Business Strategy Of Premium Pizza

Lynch quickly put the fruit to the use of these premium ingredients, which provide additional money per pizza, and draw in customers who like the stuffed crust and will continue to return for it.

"We don''t need quite as many transactions and therefore were less affected by the staffing challenges that were all seeing," Lynch said during the May 5 call.

As a result of rising food costs and rising inflation, the chain was one of the many fast-food chains to increase its prices by about 5%.

As the country recovers from the epidemic, Papa John''s shares have dropped by more than 14% year over year, while Domino''s stock has increased by nearly 24% in the same time period.

The companies in turn are attempting different things to keep people coming back. Premium products are one strategy, but it may also be used as celebrity partnerships and to invest in eateries for those who have fallen asleep during the epidemic.

During the May 5 call, he told analysts that "We will continue our winning strategy of allowing our customers, particularly those who are less price-sensitive, to self-select into our premium-priced innovation."

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