Pizza Business: Is It Recession-Proof?

In speaking with restaurant owners, it seems that about 25% of them have been in business for less than 12 months. Given that the overall number of restaurants doesn’t dramatically change year over year, this tells me that about one out of four restaurants will not be around 12 months from now. And with the economy the way it is, this number may get even bigger. 

However, even in the worst of the times, there are plenty of people wanting to get into the restaurant game. So the question becomes, are pizza businesses better positioned to sustain sales and possibly grow during the slowdown than other types of restaurants?

According to the MasterCard research, restaurant sales were slightly up last month with fast food yielding the biggest gain of about 1%. This is great news for a lot of restaurant folks, given the bloodbath still going on in the financial sector, real estate, and many other corners of the economy.

Alas, MasterCard people didn’t say much about pizza. I venture to say, pizza as a segment is probably outperforming many other types of cuisine. And most likely, it will continue to do relatively well as far as we can see.

The rationale is simple: To a consumer watching their food spending and scaling down on their eating out, pizza looks like an inexpensive alternative that is welcome in most homes and on most tables. 

Come to think of it, pizza is fast food without much of the fast food stigma. Who would want to order eight Big Macs to feed the friends that paid a surprise visit? KFC’s family combo “bucket” doesn’t seem like a good idea either. Yet pizza is socially acceptable and even attractive to a very wide demographic.

All that is not to say you are guaranteed smooth sailing if you own a pizza business. Far from it. The old pizza marketing methods are no longer effective. You are going to continue to feel a squeeze on your margins. Becoming smart about your pizza business and pizza marketing is ever so important.