While pizza has long been a favourite choice for many, its position at the top of the food hierarchy has been challenged by the emergence of various competitors and changing consumer tastes.

Share Market Live

NSE

According to Karan Taurani, Senior Vice President-Research Analyst at Elara Capital, the pizza segment faces tough competition, and its growth prospects may not be readily evident. In fact, when examining market share data from the past 3-4 years, it becomes apparent that the pizza category has ceded market share within the broader quick service restaurant (QSR) chain industry. Thus, aggregators like Zomato appear to be in a favourable position for the foreseeable future, benefiting particularly from the burger and fried chicken segments.

“If you look at the market share numbers over the last 3-4 years, pizza has lost market share as a category within the overall QSR chain. So, it's a win-win for burger, fried chicken for aggregators like Zomato, over the near to medium-term,” said Taurani in an interview with CNBC-TV18.

One notable shift in strategy that Taurani discussed is Jubilant Foodworks' move toward prioritising dine-in experiences. Traditionally known for its pizza delivery services, Jubilant Food, which operates Domino's Pizza in India, has recognised the need to adapt to the evolving market conditions. Taurani's insights suggest that the delivery segment may not be experiencing the same growth it once did due to the intense competition. Therefore, Jubilant Food's strategic pivot toward dine-in services reflects a response to changing consumer preferences and the need to explore new avenues for growth.

This transformation within Jubilant Food aligns with broader industry trends where pizza chains are diversifying their offerings and exploring innovative ways to engage with customers. The ability to adapt and provide a variety of dining experiences is becoming increasingly important for pizza chains to remain relevant in this fiercely competitive landscape.

"Our strategy of customer first and technology forward has started to yield positive results. ADS for mature stores grew by 2.7 percent sequentially, a decline in ticket size was arrested, app installs and loyalty enrolments reached a new peak, and we executed efficiently to expand EBITDA margin by 97 bps versus the previous quarter. I remain confident in our strategies and the organization's ability to overcome the slower growth phase and emerge stronger out of it," said Sameer Khetarpal, CEO and MD of Jubilant FoodWorks, post the results for quarter one of FY24.

The company opened 30 new stores in India, resulting in a network of 1,891 stores across all brands. With the addition of 23 new stores and entry in one new city, Domino’s India expanded its network strength to 1,838 stores across 394 cities.

The company opened four new restaurants for Popeyes and entered two new cities – Manipal and Coimbatore - taking the network tally to 17 restaurants across four cities.

The decline in pizza's market share, coupled with the intensified competition in the category, underscores the need for pizza chains to continually innovate and adapt to changing consumer preferences. Jubilant Food's shift toward dine-in services serves as an example of how industry players are re-evaluating their strategies to thrive in this evolving market.

For more details, watch the accompanying video

Also, catch all the live updates on markets with CNBC-TV18.com's blog

(Edited by : C H Unnikrishnan)

First Published:Sept 27, 2023 2:28 PM IST