With some financial analysts warning of a looming restaurant recession, buying stock in any chain eatery seems like a gamble. But there’s one dining category that appears to be pretty safe, according to the most recent set of restaurant earnings reports: pizza.
While more than a dozen chains have reported slowing or declining sales in the second quarter, Domino’s stock recently hit an all-time high after it reported same-store sales growth of nearly 10 percent, Bloomberg reports. Papa John’s, which reported earnings Tuesday, also saw positive sales growth — same-store sales rose by 4.8 percent, giving it the second-best showing amongst the nation’s top 25 largest restaurant chains during the quarter.
Much of pizza’s continued sales success has to do with its value: “There aren't many ways to feed a family on $7.99, which is what a 3-topping large pie will run you at Domino's,” Bloomberg points out. Profit margins on pizza tend to be higher than many other types of food, thanks to relatively cheap base ingredients (think flour, water, and canned tomatoes).
It also helps that pizza chains have been so quick to adapt to changing technology. Pizza Hut has taken a page from Uber's playbook in its launch of "Visible Promise Time,” which allows customers to see their pizza’s journey in real time. Chains have also committed to making ordering as quick and easy as possible: Pizza Hut now offers ordering via Twitter direct message, while at Domino's, ordering a pizza can be as easy as tweeting a pizza emoji or simply opening an app.
• Restaurant Recession? Pizza Party! [Bloomberg]