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Friday
Jul202018

Pizza Hut Strategy

Key Points from Pizza Hut's June 2018 Investor Conference

  • Plans to stay with $5.99 pairs & $7.99 large 3-top online (best value deal on TV for delivery) & value scores are improving.
  • Now focused on innovation because value message has been seeded. Food wins every time & Pizza Hut has eliminated the gaps that have developed over last several years
  • 55% - 58% of sales thru digital channel (mobile drives 75% of digital & new app coming).
  • Hot, fast & reliable positioning benefits from better tools, algorithms & hot sleeves driving 3 minute delivery time improvement. 
  • The chain rolled out 145,000 new pouches made with 3M Thinsulate Insulation thermal technology designed to deliver pizza 15 degrees hotter.
  • Pizza Hut also hired 14,000 delivery drivers in 2017 and there are now more than 24,000 new car toppers on the road.
  • Big bet on football with NCAA & NFL sponsorships that provide marketing on Thursday & Friday nights, Saturday days for college and Sunday & Monday nights.
  • Loyalty rolled-out last summer & corporate is very pleased with results. Points based system works well with activating NFL marketing.
  • 2,000 units have switched hands over the LTM period with Wall Street, family offices & private equity bringing 1st class operators.
  •  50% of the system has older versions of dine-in iterations. Delcos represent a much better store format with $300k to $350k construction costs & 3 year payback.
  • 100 fast casual Delcos will be developed by 4Q18, providing a new, relevant format for dine-in with a 4-5 year payback with 7 year leases.
  • 60% of pizza market consists of smaller players & pizza is "90% half local".

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