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Papa John’s new CEO told CNBC on Tuesday that the pizza restaurant chain is ready to embrace changes as technology disrupts the industry.
“We look at it as an opportunity,” said Rob Lynch, when asked about the threat of food delivery apps such as GrubHub, Uber Eats and DoorDash. “Disruption obviously creates opportunity for those willing to dive in.”
Papa John’s in March partnered with third-party delivery service DoorDash, and Lynch added that he continues to meet with third party aggregation companies.
“The customers have spoken. These apps are growing really rapidly because the customers want these services,” he said. “So, yes, they have had an impact on our industry, an impact on our business. But we believe that’s because we haven’t worked strategically with them. We don’t think it needs to be that way.”
As CNBC previously reported, consumers looking for more convenient options for food spent $10.2 billion on delivery services in 2018, up 42% from the previous year, according to Technomic data.
“We can work with them to reach more customers and do it more efficiently,” Lynch added on “Squawk Box.” “For us, we’re strategically working with them.”
It’s a different tune from pizza rival Domino’s Pizza, whose CEO Ritch Allison said on CNBC last week that the company has no plans to partner with third-party delivery apps.
“We’ve had a very strong and profitable delivery business for many years now,” said Allison at CNBC’s Evolve Conference in Chicago. “So unlike a lot of the other restaurant brands, we don’t have to decide to get in or not, or try to figure out which of these third-party aggregators is ultimately going to be the winner at the end of this shakeout.”
Domino’s executives have mentioned the competition from third-party apps on recent earnings calls, including in July, when the pizza chain reported weaker same-store sales growth.
CNBC’s Jim Cramer also referenced the pivot of Papa John’s toward apps and the Domino’s reluctance. “That’s why Domino’s has been hurt,” he said on “Squawk Box” after Lynch’s interview. “The delivery thing is a big factor.”
However, Lynch, who took over as chief executive officer in August, stressed the company wasn’t abandoning its own app. He said its mobile apps take up a large part of its business and called it the “fastest growing piece.”
“We’re making big investments to our I.T. infrastructure to support that,” he added. “Technology is a big platform for us.”