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Pizza Hut announced plans to shutter 250 underperforming U.S. restaurants during the first half of 2024, as parent company Yum Brands continues to evaluate potential sale options for the struggling pizza chain.
The closures, confirmed by Yum Brands on Wednesday, will impact roughly 4% of Pizza Hut’s U.S. footprint, which currently stands at more than 6,000 locations. The decision comes amid ongoing challenges for the iconic pizza brand, which has faced declining sales in its domestic market.
Pizza Hut’s U.S. same-store sales fell 5% in 2023, according to Yum Brands’ latest financial reports. This downturn stands in stark contrast to its primary competitor Domino’s, which reported 2.7% growth in U.S. same-store sales during the first nine months of last year. Domino’s, now the world’s largest pizza company, has yet to release its complete annual results.
“We’re targeting locations that haven’t been meeting performance expectations,” said a Yum Brands spokesperson. Industry analysts point to Pizza Hut’s aging store designs and intensifying competition from both traditional rivals and emerging fast-casual concepts as key factors in its domestic struggles.
While Pizza Hut faces headwinds in its home market, its international operations have shown more resilience. The brand reported a 1% increase in international same-store sales for 2023, with notable growth across Asia, the Middle East, and Latin America. China represents Pizza Hut’s second-largest market outside the United States, accounting for approximately 19% of the chain’s global sales.
During Wednesday’s investor call, Yum Brands CEO Chris Turner confirmed the company plans to complete its strategic review of Pizza Hut this year but declined to provide specific updates on the process. The formal review, first announced in November 2023, is exploring various options that could potentially include a full or partial sale of the pizza business.
Pizza Hut ended 2023 with 19,974 stores globally, representing a net decrease of 251 locations from the previous year. Despite opening nearly 1,200 new stores across 65 countries in 2023, store closures outpaced new development. Yum Brands indicated Pizza Hut plans to continue global expansion in 2024 but did not specify targets for new store openings.
The brand’s current challenges represent a significant shift for a company that helped define American pizza culture. Founded in 1958 in Wichita, Kansas, by brothers Dan and Frank Carney, Pizza Hut pioneered the family-friendly pizza restaurant concept with its distinctive red-roofed buildings. The chain quickly expanded throughout the United States and eventually globally, becoming a household name in the quick-service restaurant industry.
Soft drink giant PepsiCo acquired Pizza Hut in 1977 before spinning off its restaurant division—which included KFC and Taco Bell alongside Pizza Hut—to form Yum Brands in 1997. Today, Yum Brands operates over 55,000 restaurants across more than 155 countries and territories, with Pizza Hut, KFC, Taco Bell, and The Habit Burger Grill in its portfolio.
Restaurant industry experts suggest Pizza Hut’s current strategy mirrors broader trends in the fast-food sector, where chains are increasingly focusing on operational efficiency by closing underperforming locations while simultaneously exploring new formats and digital channels for growth.
The U.S. pizza market remains highly competitive, with regional chains, independent pizzerias, and delivery-focused concepts all vying for market share in a segment that generates approximately $46 billion in annual sales. Pizza Hut’s strategic reset comes as consumers increasingly demand convenience, quality, and value—three areas where the legacy brand has sometimes struggled to keep pace with more nimble competitors.
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16 Comments
The potential sale of the Pizza Hut brand is certainly a significant development. I’m curious to see how this plays out and what it might mean for the future of the brand.
Absolutely. A sale could open up new opportunities for Pizza Hut, but it will be important to ensure the brand’s legacy and core values are preserved.
Closing 250 stores is a significant move. I hope the remaining Pizza Hut locations can find ways to innovate and provide a more compelling offering to customers.
Agreed, they’ll need to focus on enhancing the customer experience and staying relevant in an increasingly crowded pizza market.
I wonder if the struggles of Pizza Hut are a sign of broader challenges in the casual dining sector. It will be interesting to see if other major chains face similar pressures.
Good point. The pizza industry is just one part of the broader dining landscape, so it will be worth monitoring how other casual dining brands adapt to changing consumer preferences and competition.
The pizza industry is clearly evolving, and it will be important for established brands like Pizza Hut to stay nimble and innovative if they want to maintain their market share.
Absolutely. With the rise of fast-casual pizza chains, Pizza Hut will need to find ways to differentiate itself and offer a unique dining experience.
250 store closures is a significant shift. I hope the remaining Pizza Hut locations can find ways to improve their offerings and customer experience to stay competitive.
Agreed, it will be crucial for Pizza Hut to focus on their core strengths and adapt to changing consumer preferences to survive in this crowded market.
It’s interesting to see how the pizza industry is evolving. I wonder if the challenges facing Pizza Hut are indicative of broader shifts in consumer preferences and dining habits.
That’s a good observation. The pizza industry is just one part of the larger food service landscape, so these trends could have wider implications for the sector as a whole.
Interesting to see Pizza Hut struggling, especially as competition from Domino’s and other fast-casual pizza places heats up. I wonder if a brand refresh could help revitalize the Pizza Hut experience and draw customers back.
Definitely, a reinvention of the brand and store designs could be key. They’ll need to adapt quickly to stay relevant in the fast-changing pizza market.
The pizza industry seems to be very competitive these days. I’m curious to see if Pizza Hut will be able to turn things around or if the brand ends up being sold off entirely.
It will be an interesting decision for Yum Brands. Letting go of a legacy brand like Pizza Hut is not an easy call, but it may be necessary if they can’t revive the chain.