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Pizza Delivery Facing Disruption

|Includes: DPZ, Papa John's International, Inc. (PZZA)

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!

Disclosure: I am/we are short PZZA.