Monday, December 1, 2008

Dominos poised for another slice of Pizza Hut

With the latest push by Domino's Australia [DMP.AX] for more market share released today it might well be worth another look at the hapless Pizza Hut.

Restaurant Brands [RBD.NZ] the operator of the Pizza Hut Brand in New Zealand, must be wondering what they can do next to stem the flow of customers from their doors to that of their main competitor Domino's Australia which operates 76 stores in New Zealand.

Their American style advertising, where they compare the size of a large Domino's pizza to theirs(see below) smacks of a little desperation and,well, it isn't working. Domino's are still kicking Pizza Huts oily little backside in the food quality, service and price areas of the pizza business.

Customers simply like the way Domino's does its business and they are voting with their feet.

This leaves Pizza Hut management with a big problem.

What do they do next to regain their lost sales?

I doubt whether management have the answer, for they have been trying to regain their lost mojo since Domino's entered the New Zealand market in 2003 and started getting a big slice of the action from the get-go.

I do recall a rather blase' reaction to Domino's arrival along the lines that Pizza Hut was such a dominant and strong player any new entrant was going to find things very difficult in "their" market.

This has been the hallmark of their reaction to competition until very recently and it seems it has been increasingly hard to shake that complacency.

Restaurant Brands @ Share Investor

Domino's Australia Dominant in Australasia
RBD consider slicing off Pizza Hut
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
The dots get the hots
2007 FY profit analysis

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c Share Investor 2008

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