New rival is “Costco”! The heat is on! The difference between victory and defeat in the “pizza delivery war

The number of foreign visitors to Tokyo has finally surpassed the number before the COVID-19 crisis. On weekends, when the city is packed with tourists from all over the world, restaurants in Ginza are packed to capacity and people are wandering around in search of a place to sit down. The FRIDAY reporter found an unexpected spot.

Located in a prime spot along Showa-dori Avenue, a three-minute walk from Ginza 1-chome Station, the store is called “Domino’s Pizza Ginza. Although it is supposed to be a home-delivery pizza chain, the restaurant has a total of 10 seats in a spacious 130 m2 space, including four seats at a counter with electric outlets, a table for four, and one set of two tables for two. Besides the reporter, there were only a couple of foreign tourists and a male customer in his 40s.

The restaurant, which opened in July ’19 as its 600th store in Japan, employs an open kitchen. After an order is placed, you can enjoy the entire process of kneading the dough, loading the ingredients, baking in the oven, cutting, and placing in the box right in front of your eyes,” said food analyst Takao Shigemori.

About 15 minutes after ordering, the “Margherita” (S size, 990 yen) that the reporter ordered was handed to him. Upon opening the lid, the aroma of melted cheese spread out. The pizza was so hot that it almost burned my tongue, and it tasted even better than at home.

Domino’s Pizza is currently focusing on opening eat-in restaurants. However, not many people know that you can enjoy the pizza at its best and at the same price as take-out price. ……

Domino’s Pizza Japan, which operates 1015 stores nationwide, has been the first pizza delivery chain in Japan to take the top spot.

The company was founded in 1985 by Ernesto Higa, 71, a Japanese-American who spotted the pizza delivery craze in the U.S. at the time. In his home country, Domino’s Pizza employees used to deliver pizzas in plain clothes by car, but Higa devised a fashionable uniform and developed a special delivery scooter that could handle the narrow streets of Japan. We also implemented a service that was revolutionary at the time, the ’30-minute delivery guarantee,'” said food journalist Junnosuke Nagahama.

Many of our readers may remember the comedy in which Beat Takeshi (77) interferes with the deliveryman in order to get free pizza in the “Ore-tachi Hyokin-zoku” series broadcast on Fuji Television Network. The bubble economy of the time also helped to spread pizza delivery widely.

Impressed by the success of Domino’s Pizza, Hidenori Asano, 70, who founded Pizza in 1987, approached the founder Higa about franchising the company, but was turned down because of his “direct management principle.

Mr. Asano saw an opportunity to win by developing products thoroughly tailored to the Japanese palate. The dough, which was jointly developed with Asanoya, a long-established bakery in Karuizawa, is fluffy right down to the bite. The dough, developed in collaboration with Asanoya, a long-established bakery in Karuizawa, was fluffy right down to the edges and included ingredients that children liked, such as teriyaki mayonnaise, corn, and potatoes, which had never been used on pizza before. In 1991, the familiar TV commercial “Pizza Delivered! and the number of stores steadily increased despite being a latecomer to the market.

Domino’s Pizza, which originated in the U.S., specializes in classic flavors such as tomato sauce and sausage, but has few outlandish products. Pizza, a latecomer to the market, differentiates itself by offering products that combine Japanese and Asian flavors, such as “Teriyaki Chicken” and “Bulgogi”, and seasonal products such as “Bottarga and Sakura Shrimp Seafood Pizza”.

Pizza Hut, which operates 540 stores nationwide, launched its delivery pizza business in 1991, four years after Pizza Hut.

At the time of its founding, Pizza Hut was operated by KFC Holdings, the company behind Kentucky. In fact, Pizza Hut is closely related to Domino’s. The husband of Domino’s founder Higa’s sister, Aiko Okawara, Tsuyoshi Okawara, was a founding member of Kentucky Japan. It is not difficult to imagine that information was shared between the sister and brother when they opened the store.

Intensifying Campaign Battle

Pizza Hut was acquired by Kyushu-based food wholesaler Yamae in 2010, but its strength remains the same as before with its extensive side menu that includes “chicken on the bone” and “chicken nuggets. However, the number of restaurants has been increasing.

While the number of restaurants is increasing, we have not been able to offer distinctive products. With the cost of raw materials rising rapidly, they are probably trying to cope by increasing the total amount they purchase,” said Shigemori.

Although each of the three pizza delivery companies has its own unique characteristics, it is a fact that they are all suffering from the same problem: inflation.

The most expensive part of the restaurant business is labor. The most expensive cost in the restaurant business is labor. If a delivery person takes 30 minutes to bring the food to the restaurant and returns it, that alone costs about ¥1,000. So, by making eat-in and take-out available at a discount, they are trying to reduce labor costs while increasing the turnover rate of their facilities.

The winner of this “take-out campaign battle” could become the new ruler of the pizza delivery industry. The Domino’s Pizza Ginza store, which allows customers to eat-in at the beginning of this article, can be considered a touchstone of this battle. Domino’s is currently running a campaign offering half-price take-out items, but what about the other two companies?

Pizza Hut is offering the second to-go item free, or in other words, 50% off, but I have the impression that they are all similar. The most notable thing about Pizza Hut is ‘Hut Day. On the 8th, 9th, and 10th of every month, you can get a medium size pizza such as “Pizza Hut Margherita” or “Hut Mentaiko Mayo” for less than half price, 810 yen. This is a remarkable low price compared to other companies. It is easy to take advantage of because it takes place on the same day every month, and it is a very good campaign.

All three companies’ takeaway campaigns have been successful, and the pizza delivery industry has continued to perform well after Corona.

However, if you rely too much on take-out, consumers will realize that the ready-made products sold at Costco and other stores are cheaper. If this happens, the individuality of the delivery service will fade away. Further effort and ingenuity will be required in the future.

In recent years, in addition to these three companies, a fourth force, “Neapolitan Oven,” founded in 2005 and operating approximately 90 stores, has begun to make its presence felt.

The company has been promoting a stylish and authentic image, describing its pizzas as “pizzas” and its side dishes as “antipasto. If you register as a member on the app, you can get a large pizza cake 20 cm in diameter for every order over 3,000 yen in your birthday month, with an unlimited number of times during the month. In the birthday month, you can order from Naples Oven, Pizza Hut on the 8th to 10th, and Domino’s or Pizza Hut on the other days. Enjoy your pizza while using each company in this way.

The pizza delivery industry is at risk of freezing to death if it does not continue to demonstrate its strong individuality. Will the industry be able to open up new avenues and grow even more?

From the March 29 , 2024 issue of FRIDAY