(USA TODAY) Watch out Pizza Hut -- Domino's is out to eat your lunch.
Domino's, the nation's largest home delivery chain, on Monday will jump big-time into the $6.4 billion pan pizza category. Pan pizzas -- thicker than conventional pizzas and cooked in special pans -- will be sold at Domino's nearly 5,000 U.S. stores beginning Monday.
The move comes at a time Domino's is feeling its pepperonis, nearly two years after the wild success of its revamped pizza recipe. It's also a time that the $36 billion U.S. restaurant pizza industry is finally on the grow. The industry got smacked hard by the double-whammy of the economic downturn and the growth of frozen, rising crust pizza sales, but it has expanded in the past two years.
In food lingo, it might be the industry equivalent of Burger King rolling out a Big Mac clone, or McDonald's rolling out its own version of The Whopper. Among the big chains, Pizza Hut all but owns the pan pizza market, which accounts for a fat slice of its business.
Clearly, consumers like pan pizza, which is very similar to deep dish, but typically, not as lavish. It accounts for roughly 20% of the nation's pizza sales. Some 52% of consumers say they sometimes order deep dish, in a recent consumer survey from Technomic, the restaurant research firm. Pan pizza's popularity is only a few percentage points behind top-ranked hand-tossed pizza.
Who craves pan pizza? Mostly men age 35 to 44, says Technomic. And it's preferred by folks living in the Midwest and Northeastern U.S.
Now, after twice trying and failing with pan pizza, Domino's is swinging for the fences with its biggest competitive move since relaunching its hand-tossed pizza with a new recipe. A medium Domino's Handmade Pan Pizza, with two toppings, will initially sell for $7.99.
"There are a lot of people out there who love pan pizza," says Patrick Doyle, CEO at Domino's. One of five pizzas sold nationally is a pan pizza. "Now, we're going to be a player."
For its part, Pizza Hut isn't publicly flinching.
"I'm not terribly worried," says Kurt Kane, Pizza Hut's chief marketing officer. "We've been the world leader in pan pizza for 30 years. We're 100% confident that we have the right product."
Recently, Pizza Hut has seen a sales bump, thanks to two budget offerings: $10 pizzas for any size with any toppings, and Big Dinner Box specials (including two pan pizzas, breadsticks and your choice of wings, pasta or pizza rollers) for $19.99. This may be Domino's response to that, says Ron Paul, president of Technomic.
The pan pizza has been two years in development, says Doyle. "This is a category we've got to play in," he says. Even much smaller rival Little Caeser's sells pan pizza.
The dough used to make the Domino's pan pizza will be fresh. Some Pizza Huts still use frozen dough to make their pan pizzas. This fresh vs. frozen dough will be a key point in Domino's pan pizza marketing campaign, which kicks off Monday, says Doyle.
But Domino's has never been able to effectively compete in the category. In 1986, franchisees and managers didn't promote it much because it took extra time to prepare and cook. And in 1997, consumers rejected the offering.
Even then, insists Doyle, "We've never gone at it that seriously."
Bruce Horovitz, USA TODAY