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Fri, May 09, 2008 - Page 10 News List

Papa John's online pizza sales surge past US$1bn amid intense competition


Sometimes during peak hours, the phones are silent in Andy Freitas' pizza restaurants, yet the cooks are busy keeping pace with hungry customers.

That’s because orders are rolling in through the Internet.

“It’s pretty amazing not to hear a phone ring on a busy night,” said Freitas, an operating partner with the largest Papa John’s franchisee in Washington.

In the past seven years, the Louisville-based Papa John’s International has made a lot of dough from online ordering — more than US$1 billion to be exact.

The US’ third-largest pizza delivery chain trumpeted the US$1 billion milestone on Wednesday, noting that its US online sales have been growing at an average clip of more than 50 percent per year. In 2001, the chain’s online sales totaled US$20.4 million. Last year, its online sales approached US$400 million.

“It took us seven years to reach our first billion in online sales, and at our current pace and growth rate it will take us less than three years to hit our next billion,” said Jim Ensign, vice president of marketing communications at Papa John’s.

Other chains in the fiercely competitive pizza industry are tapping into the technology craze to give customers ways to order pies other than through the standard phone call or trip to a restaurant.

Dominos Pizza Inc put its own twist on online ordering early this year by introducing a “Pizza Tracker,” which lets customers keep tabs on the progress of their orders. Consumers can find out when their pies are in the oven, when they’re on the way, and even the first name of their delivery person.

The tracking system has given a “big bump” to the growing online business, said Jenny Fouracre, a spokeswoman for Ann Arbor, Michigan-based Domino’s. She declined to disclose specific online sales numbers.

Domino’s also lets customers place orders from Web-enabled mobile devices.

Pizza Hut said its online orders have grown sixfold in the last three years. Company spokesman Chris Fuller said the online segment was a significant part of the overall business, but he wouldn’t give specifics.

Pizza Hut, the nation’s biggest pizza chain, also allows customers to order via text messaging and mobile Web.

The unit of Yum Brands Inc soon will unveil a new method for ordering pizzas, dubbed “Pizza Hut Shortcut,” that it says will be the fastest in the industry. Customers will be able to download a “widget” onto their computers that will let them place their favorite pizza orders with just one click.

Since launching its Web-based ordering in 2001, Papa John’s said it had invested more than US$15 million in online ordering technology. Customers can place online orders up to 21 days in advance. Another function lets consumers repeat their most recent orders with just one click.

Papa John’s said more than 20 percent of its sales come from online or through text messaging, an option it introduced last year.

The company said text sales are meeting expectations, but it didn’t provide specifics.

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