The pizza market in 2023: ‘It’s too crowded’

The highly competitive nature of the pizza category hasn’t deterred fresh operators from trying their luck - despite signs of stuctural decline at the top of the market. From Zia Lucia’s cricket flour base and Yard Sale Pizza’s designed-for-delivery offer to TikTok star Thomas Straker’s take on flatbread, emerging concepts are getting increasingly creative to avoid being a drop in an ocean of pizza brands.

One operator who knows a thing or two about pizza is David Page, former chief executive for PizzaExpress and chairman of Franco Manca operator Fulham Shore. He tells MCA his advice to up-and-coming pizza operators would be to try something else: “Go into a different cuisine than pizza! It’s too crowded.”

The reason for this, Page says, is because the landscape has changed enormously since his time at PizzaExpress in the 1990s – for the better.

“Barriers to entry in the UK restaurant market have been lowered or removed,” he explains. “It’s easier regarding planning to open a restaurant in previously retail-only shops.

“The availability of locations has massively increased due to the decimation of retail. Rents have halved.”

According to Lumina Intelligence, Italian-inspired casual dining restaurant and pizza chains, including Prezzo, PizzaExpress, and Pizza Hut continue to see a decline in outlets as consumers move away from the mid-market.

As the Operator Data Index for Q2 2023 reports: “This shift is toward either more value or premium-led ends of the market, driven by the cost-of-living crisis limiting consumer spending power.”

PizzaExpress and Pizza Hut retain their positions in a list of the top 10 branded restaurants by outlets, with 340 and 158 sites respectively as of December 2022.

However, these numbers are forecast to decline by between 4-6% - and turnover by -c10% for PizzaExpress and c20% for Prezzo and Pizza Hut – creating breathing space for existing operators and some room for new ones to enter the market.

The same data shows Rudy’s Pizza Napoletana, Fireaway Pizza, and Pizza Pilgrims are among the top 10 brands by outlet growth.

“Familiarity and value is a great space for pizza right now, with high street chains being a staple option for us across the country for a classic meal out,” Kateline Porritt, head of trends at food consultancy Egg Soldiers, tells MCA. “Neapolitan pizzas have bedded themselves into the market over the last 10 years, with Pizza Pilgrims regularly being claimed as a favourite pizza of chefs and foodies having pivoted well into kits through Covid.

“Franco Manca is set for further nationwide expansion after being bought out this year. Retail quality has crept up in that time to make supermarket pizza a real contender.”

While Neapolitan might have been all the rage in the 2010s, more recent debuts by the likes of Detroit Pizza London have seen US-style pizza claw back some market share.

“Chicago, New York-style, deep dish pizza should be banned by law,” Page tells MCA. “They are a ghastly invention by US marketing execs. It’s shepherd’s pie by any other name.”

Despite fears of US-style pizza taking over, Porritt underscores that it is innovative takes on the classics rather than any one type of pizza dominating the current market.

“The blurred line of what constitutes a ‘pizza’ is what we are seeing at the moment,” she adds. “Straker’s ‘flatbreads’ are distinctly pizza-like; sfincione is more akin to a topped bread but labelled Sicilian pizza; Detroit pizza is not too dissimilar; and a New York slice, is it a meal or a snack?”

Innovation also includes twists on the now-embedded sourdough base. The rise of the neighbourhood pizza chain has seen independents like Zia Lucia introduce 48-hour slow-fermented charcoal dough, while Yard Sale Pizza offer a hybrid product, a blend of Neapolitan and New York-style pizza designed for delivery.

Four Hundred Rabbits serves up artisan gelato, craft beer, and natural wines, while Pizza Punks’ self-professed neither Neapolitan, nor New York-style pizza offers unlimited toppings for a flat fee.

Yard Sale Pizza founder Johnnie Tate told MCA last week: “We do lots of collaborations to be creative with the customer experience. Pizza has definitely become more competitive…there are lots of new independents emerging.

“We can’t rest on our laurels – having a great quality product and service is critical.”

Like Page, he mentions low rents, which have been key to the brand’s successful model. With 11 neighbourhood locations under its belt, Yard Sale sees scope to go up to 150 and is now confident in entering city centres, while Zia Lucia similarly looks to pivot away from its neighbourhood base and into prime central sites.

Despite corresponding declines in outlet numbers and turnover, the more established pizza chains are determined to stay relevant through increasingly omnichannel approaches.

PizzaExpress launched a white label delivery platform with Uber Eats and unveiled an overhaul of its retail offer earlier this year, with a new premium tier of ‘Restaurant Favourites’ in supermarkets.

Pizza Hut, meanwhile, is focusing its efforts on a digital-first guest experience as well as launching its first express concept stores, catered to customers wanting a slice on the go.

Similarly, Domino’s resolutely holds on to its stronghold in the UK market as it works on improving its lunch and food-to-go offering, with a loyalty programme on the horizon.

On the other hand, Franco Manca – one of the pioneers of Neapolitan pizza in the UK – was acquired by Japanese foodservice company Toridoll earlier this year in a £93m deal engineered by Page, and will expand globally under its new ownership, according to Toridoll CEO Takaya Awata.

Like Porritt, he cited the universal appeal and familiarity of pizza as foundations to build upon even during times of economic hardship.

“The value question comes into play here,” Porritt says. “Is it different and novel enough to warrant a meal out? Is it small enough to be an impromptu snack and act as an affordable option? Is a pizza fancy enough to splash the cash on?”

 

David Page will appear in a keynote session as part of the agenda at MCA’s upcoming Restaurant Conference on 9 November. For tickets and more information, please click here.