OnLine Pizza Sales

I admit, I was surprised by this:

Papa John's surpasses $1 billion in online pizza sales
Email this Story

May 8, 12:17 AM (ET)

By BRUCE SCHREINER

(AP) In this Sept. 23, 2005 file photo, Rich Butler, general manager of a downtown Louisville, Ky., Papa... Full Image

LOUISVILLE, Ky. (AP) - Sometimes during peak hours, the phones are silent in Andy Freitas' pizza restaurants, yet the cooks are busy keeping pace with hungry customers.

That's because orders are rolling in through the Internet.

"It's pretty amazing not to hear a phone ring on a busy night," said Freitas, an operating partner with the largest Papa John's franchisee in the Washington, D.C., market.

In the past seven years, Louisville-based Papa John's International Inc. (PZZA) (PZZA) has made a lot of dough from online ordering - more than $1 billion to be exact.

The nation's third-largest pizza delivery chain trumpeted the $1 billion milestone Wednesday, noting that its U.S. online sales have been growing at an average clip of more than 50 percent per year. In 2001, the chain's online sales totaled $20.4 million. Last year, its online sales approached $400 million.

"It took us seven years to reach our first billion in online sales, and at our current pace and growth rate it will take us less than three years to hit our next billion," said Jim Ensign, vice president of marketing communications at Papa John's.

Other chains in the fiercely competitive pizza industry are tapping into the technology craze to give customers ways to order pies other than through the standard phone call or trip to a restaurant.

Dominos Pizza Inc. put its own twist on online ordering early this year by introducing a "Pizza Tracker," which lets customers keep tabs on the progress of their orders. Consumers can find out when their pies are in the oven, when they're on the way, and even the first name of their delivery person.

The tracking system has given a "big bump" to the growing online business, said Jenny Fouracre, a spokeswoman for Ann Arbor, Mich.-based Domino's. She declined to disclose specific online sales numbers.

Domino's also lets customers place orders from Web-enabled mobile devices.

Pizza Hut said it's online orders have grown sixfold in the last three years. Company spokesman Chris Fuller said the online segment is a significant part of the overall business, but he wouldn't give specifics.

Pizza Hut, the nation's biggest pizza chain, also allows customers to order via text messaging and mobile Web. The unit of Yum Brands Inc. (YUM) (YUM) soon will unveil a new method for ordering pizzas, dubbed "Pizza Hut Shortcut," that it says will be the fastest in the industry. Customers will be able to download a "widget" onto their computers that will let them place their favorite pizza orders with just one click.

Since launching its Web-based ordering in 2001, Papa John's said it has invested more than $15 million in online ordering technology. Customers can place online orders up to 21 days in advance. Another function lets consumers repeat their most recent orders with just one click.

Papa John's said more than 20 percent of its sales come from online or through text messaging, an option it introduced last year. The company said text sales are meeting expectations, but it didn't provide specifics.

Freitas said online business is driving higher overall sales at his more than 50 Washington-area stores. Online orders account for about half of overall sales at a couple of his restaurants, he said.

"I knew it would be a big part of our business, but this has blown my expectations away, and I think it's even going to go higher," Freitas said.

The concept is tailored for customers like Emily Goatcher of Raleigh, N.C.

"I'm so into the Internet and the ease of doing things that way," she said in a phone interview.

The online option lets her scan the menu and look up specials. She also thinks there's less of a chance of getting the wrong order. But the mother of two young children said the main attraction is convenience.

"Being able to log in and do it versus trying to talk over a baby crying or a 2 1/2-year-old that's running around the house is probably one of the main reasons I like to order that way," Goatcher said.

Not everyone in her family has made the Web-based conversion - her husband still places orders to Papa John's the old-fashioned way by phone, she said.

Ensign wouldn't tip the company's hand on future tech-driven ordering, but he said Papa John's plans to roll out new methods in coming months to make it even easier for customers to place orders.

He predicted the ordering options will multiply as technology advances.

"We're just going to maybe have five or six or seven or eight or nine or 10 different ways the consumers can order," he said, seemingly conjuring up new options as he spoke.

Sphere: Related Content