Is it time to say goodbye to your favorite local pizza joint?
A recent study published by Aaron Allen, a global restaurant consultant, found that technology is the primary killer of roughly 2,549 independent pizza parlors nationwide per year. This can be attributed to the popularization of digital food ordering services and their connection with national pizza franchises. Chains like Domino’s, Pizza Hut, and Papa John’s provide their own mobile applications with simplistic platforms for ordering food.
America’s three largest pizza chains, Domino’s, Pizza Hut, and Little Caesar’s, processed nearly 15 percent of all of the pizza industry revenue via their digital services. The Ninja Turtles might even be using these services seeing as how they live in the sewers and all. But, then again, pizza shop owners in Manhattan have seen weirder things than mutant ninja turtles…
That said, the reliability of franchised dining has also contributed to the rise of these pizza princes.
America is home to about 75,000 pizzerias, making up 7.5 percent of the restaurant pie. Last year saw pizza revenues decline overall (just $38.5 billion sold), while chain brands were met with a 3.38 percent increase in their sales: Domino’s had a 9 percent increase in revenue and Papa John’s saw its revenues increase over 7 percent. Smaller pizza eateries were met with a 5 percent decrease in sales. And while pizza franchises only make up 48 percent of all pizza shops, they bring in 61 percent of total pizza revenue.
Mom-and-pop pizza shops are struggling to compete with franchises that can market themselves on a national level. One of the findings from Allen’s research suggests that 95 percent of independent restaurants do not have websites suitable for mobile networking. And, because 51 percent of Google’s mobile searches are for restaurants, smaller pizzerias are not even a consideration for those with a hankering for a slice.
What’s making it harder for the little guy to snag customers is the ease of at-your-fingertips ordering made possible by smartphones. New digital food ordering apps, such as UberEats, Caviar, Postmates and DoorDash reported revenues as high as $400 million in 2014, and that figure is predicted to jump to $1.6 billion by the end of 2016. Fewer than 25 pecent of restaurants have their own mobile app in the entire American restaurant business.
The act of telephoning a pizzeria to order is going the way of the dinosaurs as these food ordering platforms partner with the national franchises. There was a 27 pecent decrease in orders by phone from 2010 to 2015, while web orders saw a 124 percent increase. Nearly half of Americans (47 percent) are ordering food online — even at dine-in restaurants people choose to order at a kiosk as opposed to speaking to an employee. The study reports that digital ordering is now estimated to be growing at a rate 300 percent faster than dine-in restaurant traffic.
Just as Netflix displaced Blockbuster, it is apparent that the customers of the future will be making the transition from over-the-phone orders to online. However, while corporate pizza enterprises can outdo small businesses in the technical aspect, there’s no argument that local pizza tastes exponentially better when done right. Local pizzerias cater to local tastes. My favorite pizza pies are regionally developed, from tomato pie in Utica, NY to the various creations at Tino’s in Oneonta, NY.
It’s time for small pizza dives to jump into the 21st century and capitalize on social network marketing and mobile application technology.