- Papa Johns to close about 300 North America restaurants
- Around 200 locations scheduled to close this year
- Company cutting 7% of corporate workforce
- Fourth-quarter same-store sales fell 5.4%
The pizza chain Papa Johns has indicated that by the end of 2027, it will shut down about 300 poor-performing restaurants in North America, as the company deals with the decline in consumer demand and the upsurge in promotional efforts.
The closures will occur in approximately 200 locations this year, the executives reported to the quarterly earnings call of the company. The impacted restaurants were termed as those who are not up to the brand standards or cannot find a sharp direction to sustainable financial growth as expressed by Chief Financial Officer Ravi Thanawala, who is also the president of operations in the North America region.
The corporation never came up with a list of affected stores. According to its annual report, Papa Johns had an estimated 3-500 outlets at the year-end 2025. The chain is also retrenching about 7 percent of its corporate staff on top of the restaurant shutdowns, shrinking its about 700-person workforce head office staff.
Sales Slump Effort Turnaround Pressures
The shutdowns come after the toughest fourth quarter ever recorded by Papa Johns when the company registered a 5.4% decrease in same-store sales in North America. The firm said that it fell because of a poor consumer environment and high promotional levels.
Papa Johns International Inc. shares dropped by 2.3 percent in trading in the Asia-Pacific on Thursday after the earnings announcement, according to Reuters market information, following the 0.8 percent drop of the earlier day. This stock has dropped by an estimated 12% in a year to date as investors determine whether the company has the ability to turn around.
Chief Executive Todd Penegor said the quarterly performance indicated a conservative consumer spending behaviour, especially by upper-income and low-income families. Similar pressures have been reported by restaurant chains across categories as customers trade down or reduce discretionary spending. The restructuring plan adopted by Papa Johns is designed to enhance operational efficiency coupled with consolidation of the demand at the nearby stores that are performing better.
According to Thanawala, "in certain instances rather than the sales being transferred to different locations in the same market, they were transferred to different places." As the intensity of competition in the industry increases, major players in the pizza industry have been performing differently. At the beginning of this month, Pizza Hut declared that it intends to shut about 250 of its outlets in the first half of the year due to parent company Yum!.
Brands involves strategic analysis of brand
In the meantime, Domino Pizza franchise has recorded a growth in same-store sales of 3.7 percent in the fourth quarter, which was enhanced by value-based promotions and marketing campaigns. According to Reuters data, Domino increased its shares by 1.4 percent earlier this week upon the release of its earnings report.
Papa Johns is also trying to put a cheque on the performance by standardizing the menu and improving operations. Penegor mentioned that the company has realigned ovens to enhance uniformity of products, and it has recently launched a new pan pizza in an effort to appeal to customers. The intended shutdowns amount to almost 9 percent of Papa Johns in North America in the following two years.
Although the company is forecasting short-term expenses on shuttering stores, executives stated that the decision made on weaker units is aimed to ensure overall brand health and enhance long-term profitability. The reorganisation is an indicator of continued pressure on the fast-casual restaurant business as chains are accustomed to weaker demand and more competitive issues concerning value-aware customers.
