• Wall Street Journal, Monday, February 23, 2009 11:15 AM

Pizza chains are getting squeezed by changing tastes, rising prices (some in the industry refer to cheese as "white gold"), and the dramatic pullback in consumer spending, Richard Gibson reports. John Schnatter, founder and interim CEO of Papa John's International, says conditions late last year were the worst he'd seen in his 32 years in the business.

"The pizza segment's struggles are part of a longer-term secular trend in which market share is being lost to healthier and fresher dining options on one side and less expensive burger and sandwich players on the other," says Walter Butkus, principal at Restaurant Research LLC.

But as the big pizza chains struggle, smaller chains and independents have enjoyed growth. Among the selling points for these smaller operators is gourmet pizza, as well as beer and wine and take-and-bake pizzas. Inexpensive, casual restaurants offering perks like sit-down service, Wi-Fi Internet access and multiple television screens are also hurting the chains.

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