Papa John’s

Jul 20, 2022 | Report Announcements

Papa John’s Executive Summary

Papa Johns’ “better ingredients, better pizza” positioning centers around its premium-ingredient platform (built upon its six-ingredient, never-frozen original pizza dough), garlic dipping sauce and pepperoncinis. Brand positioning also emphasizes: menu innovation designed to drive reach into new demos and to diminish the need for discounting; digital strength; and efforts to increase relevancy among the younger demos with marketing tie-ins with NBA’s Shaq (spokesperson). Further, the chain has succeeded at expanding its market reach (into a younger & higher income demo) by leveraging its DSP marketplace delivery option. An emphasis on premium priced products drives higher checks with fewer transactions, causing less stress on the restaurant staff. The strategy is to let customers, especially those who are less price sensitive, self-select into premium priced innovation. Half of the chain’s 75% digital mix is driven by its Papa Rewards loyalty program (24.5MM members up from 12MM two years ago) which generates higher frequency and higher tickets with personalized offers. Having said all this, price-value remains a long-term challenge as the chain does not emphasize everyday value, online discounts or carryout deals. This could become a problem as inflation continues to erode consumer strength. Also, the chain’s emphasis on check more so than traffic might prove to be a snare over the long-term. In conclusion, Papa John’s is executing around a solid strategy of restoring its upscale positioning which, while working for now, may need to be tweaked towards value depending on the economy.

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