America's 4th Largest Pizza Chain Struggles to Recover After Sales Collapse: "A Big Miss"
Sales at Papa John's are down 4% over the last quarter, continuing an alarming trend the pizza chain is trying to reverse—but CEO Todd Penegor believes a back-to-basics approach could save the company. Formerly the CEO of Wendy's, Penegor came out of retirement in August 2024 to try and get the failing pizza chain back on track, and just completed his first quarter with the company. Penegor is trying to fix mistakes like the company not prioritizing local advertising, which negatively impacted local franchises.
"Not having the co-ops there to actually bring the franchise community together in the communities that we serve… is a big miss, especially in a business like pizza that's very regional and localized," Penegor said at the ICR conference in Orlando, FL, via Nation's Restaurant News. "So, there may be some investments we are going to have to front run in some company markets to prove a strong business case moving forward."
Penegor knows he has his work cut out for Papa John's to get back to "Better Ingredients, Better Pizza", and get the chain up to speed technology-wise. "We've made our restaurants really tough to operate," he said. "We've added a lot of SKUs [stock keeping units] over the last few years, and a lot of rhythm-breakers. We'll take a look at some of the lower-moving SKUs and pull them out of the rotation. We want to sprinkle in some great innovation around the core menu…We really need to get back to being the best pizzamakers in the business."
Penegor believes the company needs to invest in retraining staff and kitchen employees, even working on reformulating the cheese and dough used in Papa John's pizzas.
"We've got a ton of customer data, but we've just under-leveraged it," he said. "We have a lot of testing going on with the CRM [customer relationship management] database and we're starting to see that resonate with customers. We revamped our app, though we still have some work to do…and we'll continue to push that piece of the puzzle."
Despite all the recent negativity, Penegor seems cautiously optimistic about the future of the brand. "They're feeling good about the folks that we put in place to lead the brand forward," he said. "They know we have to go chase transactions a little harder in the near term because they know if we get more customers to show up more often we can actually drive and trade them up and drive some profitability in this business." Let's hope it works!
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