Are Americans getting sick of pizza?
Big pizza brands have struggled recently after demand skyrocketed earlier in the pandemic. Same-store sales at both Domino’s and Papa Johns rose just 1% in the fourth quarter and were flat in 2022 overall.
The slowdown has largely been chalked up to changes in consumer behavior. Domino’s said more customers are choosing to cook at home rather than pay high delivery prices. Distributor Performance Food Group (PFG) even suggested that people have “pizza fatigue” after eating so much of it over the past few years.
“I think that as there's been more options for the consumer, they’ve consumed less pizza,” said PFG CEO George Holm, according to a transcript on financial service site Sentieo.
Ilir Sela, CEO and founder of pizza tech company Slice, sees something different happening.
“There’s definitely no pizza fatigue,” he said. “I think pizza’s a staple. I don’t know that there’s a fatigue and I don’t know that people are flocking to order pizza every day. It has been and it will be hopefully a once a week habit.”
Slice, which provides technology, marketing and other tools for more than 19,000 independent pizzerias, said operators in its network are still going strong and even taking share from the big players.
Average order values at Slice restaurants are up 4% to 5% year over year in 2023, and online order volume is up 15% to 20%, he said. Delivery makes up a majority of those sales and has not wavered.
“I think that’s a very healthy environment. That’s an amazing environment,” he said.
He believes that indies’ embrace of technology like online ordering and digital marketing has helped level the playing field between big and small players. He noted that Slice’s network alone is about as large as all the pizza chains combined.
“I think they’re taking share from the big chains,” Sela said.
Indeed, indie shops are growing while chains are slowing. A record 4,800 new independent pizza shops opened in 2022, a 12.5% increase, Sela said, citing data from PMQ’s annual Pizza Power Report. Pizza chain openings, meanwhile, were flat year over year, with 222 new stores. PMQ called it a “mini-boom” for independents.
“At some point, the big chains, Domino’s, they’re going to reach saturation,” Sela said. “When the supply is too strong, the demand is gonna level off.”
Sela founded slice in 2015 to help support New York pizzerias, including the one owned by his family. Eight years later, the strength of the company and independent pizza in general has Slice thinking big—like IPO big.
“We’re excited about getting to a point where we scale and we’re executing like a public company,” Sela said. “It wouldn’t be this year, but I hope over the next 12 to 18 months that we’ve earned the right to operate as a public company.”