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Chris Moore,
Domino's Pizza's chief operating officer, said: "Companies which
embrace e-commerce channels look set to capitalise most on sector growth."
While the
convenience foods sector is poised to boom, the home delivered pizza
market is expected to outgrow the sector by up to 12pc a year.
It is expected
this part of the market will grow from its figure of £540m in
2004 to £1.1bn in 2015.
Companies such
as Domino's have been one of the major beneficiaries of this growth.
Mr Moore said:
"Domino's Pizza really began to boom ten years ago because we
could fulfill a need of a cash-rich, time-poor society."
Domino's Pizza
has said it had made a good start to the year, but that second-half
sales would moderate due to tougher comparisons. Sales in the first
16 weeks to 23 April were up 18.9% to £70m, and up 8.8% on a
like-for-like basis at its 357 mature stores, the UK's leading pizza
delivery company said ahead of Thursday's annual meeting. "Whilst
we are encouraged by the good start to 2006 and look forward to the
positive impact from this year's World Cup, we are also mindful of
the high sales levels reached in previous years during the second
half of the year," Domino's said. "As a result, we
anticipate that like-for-like sales growth in the second half will be
more modest than the increases achieved year-to-date," it said,
adding that it was confident expectations for the full-year would be
fully met.
The pizza
market comprises two large sectors, chilled and frozen, which are
broadly even in size, plus a small pizza base/topping sector for home
pizza-making. The market was worth £728 million in 2004 and is
growing, although price deflation has been cutting into value growth.
This is mostly due to the very competitive nature of the business. In
order to combat this, suppliers have been improving product quality
as well as looking to build up the premium sector.
According to
Mintel, "Pizza has an image as an enjoyable but unhealthy food.
Improving the image of the product could help to build up a large
premium sector."
Sales of
pizzas grew by 26% between 1999 and 2004 to reach £728 million
in the latter year. The level of competition in the market is such
that price pressure has always been a problem but it has tended to
affect the frozen sector more than the chilled one. That was not the
case in 2004 as the chilled sector was affected by price promotions,
strong competition, and the strategy of retailers to attract more
consumers into chilled convenience food markets by reducing price at
the lower end of the market.
" One of
the key trends in the market has been the move from deep pan bases to
thin bases, which are seen as lighter and healthier. Toppings such as
cheese and tomato, pepperoni, ham and pineapple/mushroom are still
the most popular but the fastest growing ones are chicken and beef."
" Around
a half of consumers buy frozen pizzas, compared with 28% who buy
takeaway/home delivery pizzas and 26% who buy chilled ready-made pizzas.
" Some
16% of consumers would rather order a takeaway than cook a pizza themselves.
" For 30%
of consumers the topping is more important than the base and it is
the topping that makes the pizza.
The pizza
experience in Americais one of size: extra large pizza, a third
bigger than the already obscene super jumbo pie; Kong pizza, the size
of a fantastic great ape causing some commentators to ask, "
Where are we going?"
They already
eat muffins, bagels, and croissants that are four times the size of
those standard 30 years ago. They buy family packs to save money but
only end up overflowing their plates. Restaurant meals are super
sized and bloated on enormous platters. Even expansive salad bowls
have buried their greens under croutons, cheese, fruit, nuts, fried
strips, and heavy cream dressings, and nouvelle cuisine has been
laughed off the stage with hoots of derision at its paltry offerings.
Whilst
nutrition experts debate about the best foods to eat, the balance we
need in our daily intake, and the ratio of proteins to carbs to fats,
but the growing size of the pizza and the paunch of America clearly
reveals the real national problem not only there but in UK. It's not
what we eat - it's HOW MUCH.
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