Pizza Hut Closed More Than 600 Restaurants Last Quarter
You'd think 2020 would be a good year for pizza. With everyone stuck at home and pretty much giving up on any semblance of eating healthy, this year has essentially produced the perfect business climate for big companies like Domino's, Papa John's, and Pizza Hut.
To an extent it has: Pizza Hut boasted same-store sales growth of 6 percent in recently-released third quarter data. At the same time, though, that hasn't been enough to stop the closure of a full 672 of its locations.
While that sounds like an eye-popping statistic, it's important to place it in context. Earlier this year, NPC International, one of Pizza Hut's largest franchisees, filed for Chapter 11 bankruptcy. That explains the closure of up to 300 of the locations, which Pizza Hut parent company Yum! Brands fully expected to happen.
"We consented to up to 300 mutually selected closures of underperforming and primarily dine-in stores," Yum CFO Christ Turner said on the company's third quarter earnings call, according to Nation's Restaurant News. "These closures are largely complete."
Though Yum's quarterly earnings report doesn't disclose further information about the other roughly 372 Pizza Huts that closed, it does note that they opened 148 new locations across 32 countries. So effectively the net total of its closures is somewhat lower.
It's likely that the increased customer desire for and brand emphasis on streamlined takeout and delivery operations could have been a factor. Pizza Hut's 6 percent same-store sales growth was driven by those sorts of "off-premise" sales, with overall digital sales lifting for the quarter as well.
So if you're lamenting the recent disappearance of a local Pizza Hut, you're not alone — or crazy. The good news is that rebounding sales suggests Yum! Brands hopefully shouldn't have to trim their portfolio of pizza establishments too much further. So just hang tight — and maybe throw a small business your pizza money while you're at it.