Dominos and Pizza Hut abroad

[HarryHaller73]

Why is the quality of American pizza chains like dominos and pizza hut so inferior in America to what they serve abroad?  Everything from the bake quality to the crust and ingredients.

[the1mu]

At least in Asian countries, it is not a "bargain" food but rather a high class restaurant and therefore, both to fit the market's food tastes, and maintain their standard as an expensive destination place, they tend to give more attention to those details. However, I would not say the quality of their crust is better than the states. They just are better at making it look decent.

[Pete-zza]

Domino's and Pizza Hut are two of the largest pizza chains in the U.S., if not the world, and have massive infrastructures for turning out millions of pizzas. In fact, Pizza Hut and Domino's are number one and two in the U.S. with over $22 billion dollars in annual sales. Their operations outside of the U.S have not yet achieved equal status to justify the kinds of investments they have made in the U.S., including in franchising, sourcing of ingredients, distribution, etc. Also, in Pizza Hut's case, in many foreign countries, such as Malaysia and the Philippines, the dough is made fresh, sometimes in commissaries, and delivered fresh to their stores. In the U.S., PH uses frozen doughs for most of its pizzas.

Peter

[the1mu]

Peter,

I didn't know that some countries had fresh dough made for them.

In China, one parent company owns/controls all the "franchises" and it is ALL frozen dough.

[Pete-zza]

Peter,

I didn't know that some countries had fresh dough made for them.

In China, one parent company owns/controls all the "franchises" and it is ALL frozen dough.

Aric,

For PH Malaysia, see:

http://www.pizzahut.com.my/dining/about-15min.html

For PH Philippines, see:

https://order.pizzahut.com.ph/en/frontend/about/our_history

For Domino's in the UK, see the article at:

http://www.bakingbusiness.com/Features/Company%20Profiles/First%20of%20its%20kind%20pizza%20production.aspx

Peter

[HarryHaller73]

At least in Asian countries, it is not a "bargain" food but rather a high class restaurant and therefore, both to fit the market's food tastes, and maintain their standard as an expensive destination place, they tend to give more attention to those details. However, I would not say the quality of their crust is better than the states. They just are better at making it look decent.

i did not know they are considered a higher class food.  do you know what the general price is of a dominos or pizza hut pizza in asia?  do you think pizza has become a mainstream food or is it still considered something very foreign?

[HarryHaller73]

Domino's and Pizza Hut are two of the largest pizza chains in the U.S., if not the world, and have massive infrastructures for turning out millions of pizzas. In fact, Pizza Hut and Domino's are number one and two in the U.S. with over $22 billion dollars in annual sales. Their operations outside of the U.S have not yet achieved equal status to justify the kinds of investments they have made in the U.S., including in franchising, sourcing of ingredients, distribution, etc. Also, in Pizza Hut's case, in many foreign countries, such as Malaysia and the Philippines, the dough is made fresh, sometimes in commissaries, and delivered fresh to their stores. In the U.S., PH uses frozen doughs for most of its pizzas.

Peter

i just looked at the stock chart of dominos (DPZ), pizza hut (YUM), and papa johns (PZZA) and they are trading near or at all time high prices.  they must be doing something right both here and internationally.  these growth rates are phenomenal. papa johns was trading at $6.39 in 2008.  it is now $81.24.  dominos was trading at $2.61, now at $155.08!!!

[Pete-zza]

With respect to China, where Pizza Hut currently has a presence, the parent company of PH, Yum Brands, is in the process of exiting the China market where it had many health related issues and where sales were declining. Here is a recent article:

http://www.wsj.com/articles/yum-brands-sells-slice-of-china-business-ahead-of-spinoff-1472808784

Business will still continue for PH and its sister companies in China but under franchising. The China business will be part of a spinoff and have its own shares.

Peter

[the1mu]

i did not know they are considered a higher class food.  do you know what the general price is of a dominos or pizza hut pizza in asia?  do you think pizza has become a mainstream food or is it still considered something very foreign?

Definitely not mainstream. It has a strange place in the food chain here in that most people will go there but as a "treat" or as an "experience" not because it is accepted or frankly, even liked.

This evidenced by the other items the sell including steaks, pasta and, hey this, breakfast foods! People here typically will order one pizza and a few of the other main dishes that are more in line with what they can handle.

I had to go look at prices (for my city, a 2nd tier city), and here are some examples:
Hawaiian pizza - regular 58rmb, stuffed crust 78 rmb
Beijing duck pizza - regular 66 rmb, stuffed crust 84 rmb
Supreme pizza - regular 74 rmb, stuffed crust 92 rmb
Lasagna - 45 RMB
Spaghetti with meatballs - 33 RMB
A set for two people including a regular supreme pizza, 4 chicken wings and 2 drinks - 139 rmb

I believe their regular pizzas are 9". If you want further entertainment, I will be happy to post more of the "flavors" offered. They rely on extravagant toppings to entice customers. 

For comparison, a bowl of noodles eaten at lunch averages around 10 rmb and the price of a "dish" is maybe 15-25 for a meat dish and 10-15 for a veggie (normal food places, not fancy; also city center compared to farther out obviously has some variance). Starbucks, which has been much more widely accepted (go figure!) costs about 38 rmb for a caramel macchiato, vente.

As you can see, Western food has its own pricing structure very much outside of the daily life of the average Chinese person.

My wife and I have done some market research in the past and the number one reason people don't eat Western more is because of accessibility (not price alone). Meaning they don't find it convenient to eat, since it all "destination dining" and long sit down meals. We actually think a slice joint would do really well here, for this reason alone!

[the1mu]

With respect to China, where Pizza Hut currently has a presence, the parent company of PH, Yum Brands, is in the process of exiting the China market where it had many health related issues and where sales were declining. Here is a recent article:

http://www.wsj.com/articles/yum-brands-sells-slice-of-china-business-ahead-of-spinoff-1472808784

Business will still continue for PH and its sister companies in China but under franchising. The China business will be part of a spinoff and have its own shares.

Peter

Wow! I didn't know. Thanks for that info Peter.

[jkb]

Domino's and Pizza Hut are two of the largest pizza chains in the U.S., if not the world, and have massive infrastructures for turning out millions of pizzas. In fact, Pizza Hut and Domino's are number one and two in the U.S. with over $22 billion dollars in annual sales. Their operations outside of the U.S have not yet achieved equal status to justify the kinds of investments they have made in the U.S., including in franchising, sourcing of ingredients, distribution, etc. Also, in Pizza Hut's case, in many foreign countries, such as Malaysia and the Philippines, the dough is made fresh, sometimes in commissaries, and delivered fresh to their stores. In the U.S., PH uses frozen doughs for most of its pizzas.

Peter

Pizza Hut recently closed here.  My son used to get free pizza coupons for reading achievements in school.   We went once.  He hated it.  There's only Domino's and about 20 mom and pops left in town.