Entering text into the input field will update the search result below

Pizza Delivery Facing Disruption

May 23, 2016 3:05 PM ETPZZA, DPZ
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Ever since I was a child, if I wanted food delivered to my house there was basically two choices, pizza or chinese food, but mostly pizza. The local pizzeria was the usual choice until the national chains began to grow their store bases and became the new default for home delivery of fresh hot pizza. In recent years the Dominos and Papa Johns of the world have dotted the national map and become synonymous with home delivered pizza and have hurt local pizzerias even as their product is nowhere near as good, actually it's terrible.

These fast pizza deliverers challenged loca pizzerias with price and guarantees of quick delivery, and won huge market share as we want it fast and will sacrifice taste for getting our hunger satisfied quickly.

Fast forward to today and the introduction of numerous Delivery Apps like UberEats, DeliveryDudes, Ziftys, and many others that provide the hungry homebound customer with a choice of many restaurants and food choices that can be delivered with ease, including any number of pizzerias and Italian restaurants.

Dominos and Papa Johns used to have a monopoly on home delivered pizza, that is not the case not anymore, and since that was the only thing that kept people patronizing them and eating their substandard offerings, these pizza joints are going to face daunting competitive pressure.

Both DPZ and PZZA are doing their best to incorporate new technology to their delivery systems and pizza prep, but with a multitude of choices, it seems to me that their lock on home delivery of freshly cooked food is over and will result in significant competitive pressures. This will force them to increase their offerings, read increase costs, and have to offer something other than cheap losuy pizza and fast delivery to retain their previously very loyal customer base.

The UberEats of the world are about to begin to eat their proverbial lunch and dinner!

Analyst's Disclosure: I am/we are short PZZA.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.