Late last year, Domino’s Pizza quietly opened a restaurant somewhere in the world that made it the largest pizza chain by an important measure: The number of locations.
The Ann Arbor, Mich.-based pizza chain now operates 18,057 locations, or about 250 more than Pizza Hut, which operates 17,809.
The milestone is largely symbolic. Domino’s in recent years has been steadily checking off a list of landmarks on its way toward overtaking its rival to become the world’s largest pizza chain—U.S. system sales, U.S. unit count, global system sales and now global restaurant count.
System sales are generally used as the true measure of a chain’s size, given the wide variation in unit volumes between different concepts. Still, the number of restaurants is a notable accomplishment for Domino’s, given where the two chains have historically been. And many folks still look at a chain’s size based on the number of signs it has outside of buildings.
Domino’s v. Pizza Hut, global unit count
Domino's has overtaken its rival in terms of total unit count after doubling in size over the past decade.
Source: SEC, Technomic
A decade ago, Pizza Hut was the largest pizza concept in the U.S. and the world and Domino's wasn’t particularly close in either measure. The latter, heavily in debt, was only starting to emerge from years of weakness. Pizza Hut, meanwhile, was aggressively growing in markets around the world, backed by the fast-food operator Yum Brands that had made growth in China and other countries a priority decades earlier and was starting to reap the benefits.
The change in leadership among pizza chains has been due to a combination of Pizza Hut’s U.S. struggles, in particular, combined with Domino’s impressive strength.
Pizza Hut has grown by more than 4,000 restaurants over the past decade. But all that growth has come in international markets like China—its U.S. unit count has declined by more than 1,000 restaurants over that period.
Pizza Hut’s decline has been due largely to a shift in the company’s business model, from one focused mostly on casual dining pizza restaurants to one in which the food is delivered to customers’ homes. That shift has been complicated and expensive and has led to a number of closures, particularly in the past year.
Domino’s, by contrast, has added 1,400 domestic locations over that period. That’s a wide differential in the world’s largest restaurant market and is a huge reason for the chain’s strength. Domino’s U.S. market has been on a growth tear over that time thanks to a combination of innovative marketing and technology investments that has led to consistently growing same-store sales that have made it the most profitable large pizza chain in the country.
Yet the company gets relatively little attention for its international success. Domino’s hasn’t had a same-store sales decline outside the U.S. since Bill Clinton’s first presidential term. And its master franchisees around the world have aggressively added unit count. The chain has 7,000 more international locations than it had a decade ago.
As a result, Domino’s has twice the unit count it had a decade ago.
That said, Pizza Hut has started adding units again, both in the U.S. and internationally, as its shift to takeout and delivery accelerated during the pandemic and a key franchisee was sold to the giant operator Flynn Restaurant Group.
And leadership in the competitive restaurant industry can be fleeting as new ideas take hold and companies lose or gain momentum. Still, the shift in the pizza power dynamic from Pizza Hut to Domino’s is now complete.