“Pizza prices collapsing” reads the front-page headline of the Nikkei Marketing Journal (10 August). Home-delivery pizza chains such as Domino’s, Pizza Hut and Pizza-La, which generally offer products in the range of ¥2,000 to ¥4,000, are finding themselves confronting new competition in the form of low-cost, take-away items that require virtually no waiting time.
The first of the new “one-coin” pizza shops, so named because their products sell for around ¥500 each, began springing up around 2008. Shibuya-based Endo Holdings Co., Ltd., which sells pizzas for as little as ¥350 each, opened its first Napoli’s Pizza & Caffé restaurant in April 2012, and has been opening new outlets at the rate of more than two per month.
Aeon Supermarkets have stepped up plans to open take-home pizza counters on their premises from an initial 20 to 100. Ready, it pledges, in 90 seconds, they will sell for ¥594 each. The low-budget pizzas address a different demographic, including single females and teenagers.
As opposed to start-up investment costs of about ¥21mn for a conventional pizza outlet, which must also procure delivery vehicles, the take-out pizza operations are said to require about 20% less initial investment. And, while the former typically employs five staff on weekdays and eight to nine on weekends, the latter outlets allow for much leaner operations with only two to three workers required. Yet, monthly turnover of the smaller (20cm diameter) pizzas is said to be as high, or higher than, that of the delivery shops.
In 2014, pizza sales in Japan were estimated at ¥260.5bn, with slight growth over the previous year. Delivery chains and speciality restaurants, such as Shakey’s Pizza, account for about half those sales.
“Compared with America, Japan’s pizza market is still small”, said Scott Oelkers, president and chief executive of Domino’s Pizza Japan. “The prices for home delivery items are prohibitive for everyday consumption. But if carry-home becomes widespread, more market growth will be possible”.