After regional pizza chain Eagle Boys slid into voluntary administration earlier this month, with the company’s founder, Tom Potter, compared its demise under private equity owners to the failure of Dick Smith.
But the collapse of Eagle Boys tells a bigger story about a dramatic shift in where people are buying pizza according to Roy Morgan Research.
The research business had a look at what’s going on in the sector over the last five years and found that while there was modest growth, it shows Domino’s customer numbers took off like a skyrocket as Eagle Boys went over a cliff.
In the past year to March 2016, Roy Morgan estimates nearly 5 million Australians aged 14+ hit up a pizza shop at least once every four weeks, only marginally more than the 4.8 million in March 2012.
But the big change in the market was who took their cash. In 2012, 1.8 million went to Domino’s, 1 million to Pizza Hut and Eagle Boys Pizza enjoyed a respectable 850,000 customers over the four-week average. Four years down the track, it’s all Domino’s with 2.3 million customers, with Pizza Hut shedding a quarter of its customer base to 745,000.
Here’s the chart that tells the story:
Eagle Boys fans left in droves, falling a massive 61% to 336,000 people, and rubbing spicy salami into the wounds, the rival chain Crust began to hits its straps with it gourmet focus, surpassing Eagle Boys with 400,000 pizza lovers.
And in even worse news for Eagle Boys, Roy Morgan group account director Angela Smith said that while customer crossover is commonplace in the fast-food industry, Eagle Boys customers have an above-average tendency to mix it up, with almost a third also eating Domino’s Pizza over the four-week time frame – nearly three times the national average.
“Over the last few years, increasing numbers of its customers have been eating at rival fast-food (and specifically pizza-focused) chains, making its current situation almost to be expected,” she said.
Smith says Domino’s has used technology as a selling point, while Eagle Boys has lagged behind.
“Domino’s strength lies in its clever use of technology at all stages of the ordering, delivery, pick-up and purchasing process: whether it’s allowing customers to place an SMS order using an ‘emoji’, providing an app to track a delivery driver’s progress, or offering a tech-enabled ‘fresh fast bake’ certification. It is no surprise that growing numbers of Aussies (including those who also eat at Eagle Boys) are taking advantage of its easy and convenient service,” she said.
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