Papa John’s positioning is around a relentless pursuit of “better” and bringing people together with quality differentiators that include: fresh original dough, fresh packed sauce, meats without fillers and pizzas with no artificial flavors or colors. The brand’s more recent marketing effectiveness is attributed to new creative that focuses on pizza quality together with a reallocation of ad spend away from high-cost national sponsorships into working media where it is able to reach a broader range of consumers more often. The chain has expanded beyond a primary focus of sports enthusiasts towards a broader audience (including Millennials & Gen Z) accessible on social media & digital. Also new is a sharp ramp-up in new product intros during 2019 & 1H20 which is consistent with corporate’s stated desire to evolve with consumer tastes. Papa John’s innovation expands beyond pizza (crust variations) to new food categories (including Papadias & Jalapeno Popper Rolls) which help address different dayparts (particularly lunch). Also, as aggregators have broadened delivery accessibility, Papa John’s desires to make sure they eliminate the veto vote. A low/hi promotional approach includes: $6 Papadias sandwiches; Choose 2 or More Picks for $6 Each ($12+ total); any large specialty pizza or up to 5-toppings for $14; and Papadia & large 1-topping pizza for $15. In any case, it is difficult to translate a pizza+ quality positioning into a higher price as the crowded pizza segment addresses a lower income demo. As research shows that PJ loyalists often choose a lower priced competitor, price-value remains a challenge as the chain does not emphasize everyday value, online discounts or carryout deals. In any case, everything is working together in the current operating environment to drive a nice sales rebound which includes a +5.3% system comp increase during 1Q20 and astounding +33.5% growth during May 2020. In conclusion, new management has driven a solid turnaround which has perfectly coincided with a unique time period when demand for delivery and easy, affordable carryout may be at an all-time high because of lingering COVID concerns.
