Analyst: Domino's poised to take market share

NEW YORK (AP) -- Domino's efforts to improve the quality of its pizza and the relative popularity of its online ordering service could help it gain market share in the U.S., a Janney analyst said Friday.

Executives at the pizza chain noted at a conference in Miami that the pizza category is growing at a rate of 1 percent to 2 percent a year, meaning growth in the U.S. is essentially about gaining market share, analyst Mark Kalinowski said in a note to investors. He said that Domino's and other national chains, such as Papa John's International Inc. and Pizza Hut, which is owned by Yum Brands Inc. could take away share from smaller chains because they have more sophisticated online ordering technologies.

That is an advantage at a time when people are gravitating toward digital ordering and regional chains and mom-and-pop restaurants don't have the resources and technological know-how to fully keep up, Kalinowski said.

He also noted that digital ordering leads to higher spending, better customer satisfaction and lower costs for the company. Already, Kalinowski noted that Domino's has more than 3.6 million users for its iPhone app, making the No. 2 app in the food and drink category.

In addition, Kalinowski noted that Domino's has opportunities to improve its sides and desserts. Internationally, pizza also continues to grow rapidly.

Kalinowski rates the stock of Domino's Pizza Inc. as "neutral."

Its shares were up 74 cents, or 1.6 percent, at $46.20.