Pizza Hut is one of the most popular pizza chains in the world, but it is going through a difficult moment in the U.S. The company Yum! Brands, which is the owner of Pizza Hut, has announced it will close 250 restaurants across the country. This decision comes as the company evaluates the future of the brand, including the possibility of selling it, while trying to stop the decline in sales that Pizza Hut has experienced in recent years. So, let’s find out more about this decision that will break many people’s hearts.
250 Pizza Hut restaurants will close
The main reason why Pizza Hut will close 250 restaurants across the U.S. is that most of them are underperforming. Basically, they are not selling enough pizzas or making enough profit. So, the company wants to focus on restaurants that perform better and improve general results.
The Chief Financial Officer of Yum! Brands, Ranjith Roy explained that these closures will help improve the chain’s profitability. For now, there’s no information about the specific restaurants closing or the states they are located.
Pizza Hut has faced a drop in sales in the U.S.:
- Comparable store sales fell 3% in the last quarter.
- Sales for the full year dropped 5%.
This shows that Pizza Hut is losing ground to competitors like Domino’s Pizza, which have managed to attract more customers in recent years.
The strategy
Yum! Brands announced it is conducting a strategic review of the brand’s future, which means that they are considering several options to decide what to do with Pizza Hut, including possible big changes like selling the brand.
The CEO of Yum!, Chris Turner, explained that they started a formal review of the strategic options, but they can give more details about it until the analysis is finished. It is expected this review finishes before the end of this year.
This strategic review comes at an important time because Pizza Hut represents nearly half of Yum! Brands’ revenue in the United States, where it operates about 6,500 restaurants. This heavy reliance on the U.S. market means that any drop in sales has a direct impact on the company’s financial results.
Pizza Hut history and its challenges
The company has a long history in the restaurant history, with more than 50 years operating! It was founded in 1969 and by 1971 it was already the pizza chain with the highest sales worldwide. In 1977, it was acquired by PepsiCo, and later in 1997, it became part of Yum! Brands as an independent company.
However, over the years, Pizza Hut has faced several challenges. For example, in 2020, one of the largest franchisees in the U.S. filed for bankruptcy and closed about 300 restaurants. This shows that the brand has faced structural difficulties for several years.
Even though Pizza Hut still has a strong presence around the world with nearly 20,000 restaurants in more than 100 countries, the U.S. market is a very important factor for their success.
To sum up
Next time you order a slice or visit a Pizza Hut restaurant, remember: the brand is evolving to bring better experiences, stronger locations, and, hopefully, more of the pizzas you love. We will see how Pizza Hut continues to serve its fans around the country since the competition worldwide and in the U.S. is very strong.
One thing is clear, you never know whether a successful company like Pizza Hut will keep their success forever. And we have seen that successful companies that have been operating for years can also face difficult situations, even though we may not notice it.