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Did pizza chains thrive in 2020? It’s complicated

While pizza sales jumped last year, they were largely concentrated among a few chains. Most concepts saw sales declines.
Photo courtesy of Domino's

Pizza chains thrived in 2020. Consumers stuck at home ordered a lot of delivery, leading to some otherworldly numbers for concepts like Domino’s and Papa John’s while speeding the recovery of brands like Pizza Hut.

Indeed, according to the Technomic Top 500 Chain Restaurant Report, total sales among limited service pizza chains in the ranking jumped by more than $1.5 billion in 2020 to $27.5 billion, or about 6%. During a year in which consumers shied away from the industry, that was strong growth. We include both quick-service pizza chains and fast-casual concepts. 

But a deeper look at the numbers paint a different picture. All that sales growth was concentrated among the very biggest chains. Smaller chains struggled. Some of them struggled significantly.  

 

10 biggest pizza chains

Source: Technomic Top 500 Chain Restaurant Report

 

Consider this: Remove just two pizza chains from the Top 500—Domino’s and Papa John’s—and total sales actually fell. Those two chains alone grew by a combined $1.8 billion. Sales for the remaining 40 pizza chains on that ranking, therefore, declined by $300 million.

In short, consumers might have been eating more pizza, but they were strongly concentrating that pizza ordering among a small number of big chains while largely ignoring everybody else.

To wit, while the industry generated more total sales, the median performance by chains on the ranking declined. Median system sales growth last year deteriorated, from median growth of 0.6% growth in 2019 to a decline of 4.3% in 2020.

 

Pizza chain median growth

Source: Technomic Top 500 Chain Restaurant Report

 

That means that some 1,000 basis points worth of sales shifted from smaller chains to the biggest concepts.

And indeed, there were some high-profile bankruptcy filings in this group. Cici’s Pizza declared bankruptcy earlier this year after losing a third of its system sales last year, according to Technomic. And among the biggest pandemic filings came from Chuck E. Cheese, which lost more than half of its sales in 2020 because of the pandemic.

 

Total Top 500 pizza chain sales

Source: Technomic Top 500 Chain Restaurant Report

 

Another big bankruptcy came from NPC International, Pizza Hut’s largest franchisee that declared bankruptcy amid heavy debt and weak sales. The company closed 300 locations and was ultimately sold in pieces, with the rest of the Pizza Hut locations going to giant multi-concept operator Flynn Restaurant Group.

All that said, consumers are dining out again and they’re still eating pizza in the process. Many of these chains could see stronger sales this year as a result of the recovery. But the pizza business didn’t just grow, it shifted, and dramatically at that.

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