5 Major Pizza Chains Falling Out of Favor With Customers
- Domino’s pizza, lava cakes, and garlic knots
- pizza hut
- 1. Uno Pizzeria & Grill
- 3. California Pizza Kitchen
Domino’s pizza, lava cakes, and garlic knots
How competitive is the pizza segment of the restaurant industry? Very. According to survey from Statista, the total number of pizza restaurants in the U.S. reached an all-time high in 2020, topping 78 thousand units. That’s one crowded market.
For many chains, business is booming. Delivery and takeout pizza were just about everyone’s go-to comfort food during the pandemic, and sales growth has continued to hold well into 2022.
But for many—especially smaller chains and independent restaurants—sailing hasn’t been as smooth. Of the $46 billion in pizza sales generated in 2020, major chains claimed more than half, according to Statista. Regional franchises and mom-and-pops have to scrap it out for the leftovers. Even the large chains haven’t been immune, Papa John’s, for instance, recently reported that North American same-store sales declined last quarter.
Some large chains have seen some dips, but the going has been particularly tough for smaller chains. While it’s true that large pizza chains generally flourished during the pandemic, for many smaller operations, sales actually decreased, according to Statista. Here’s a look at five chains that are struggling with sales and falling out of favor with customers.
For more fast-food news, check out 7 Steakhouse Chains Falling Out of Favor With Customers.
Even though Domino’s is one of the most widespread pizza chains in the game, a few things have caused a significant dip in sales. The company saw a surge in ordering demand throughout the pandemic and struggled to keep up, causing U.S. same-store sales to slip by 3.6%. Domino’s has not only found new challenges in attempting to efficiently staff stores to support the higher production needs, but the pizza chain also has seen major customer outcry on the quality of its products. Customers are unsatisfied with long delivery wait times, overpriced pizza that tastes like cardboard, and the variety of inconsistencies regarding ingredient quality, order follow-through, and even customer service. With so many loose ends, it’s no wonder that customers are running to the pizza chain less.
In the height of 2020, Pizza Hut ended up having to close up to 300 locations, according to CNBC. Unfortunately, while things haven’t been getting worse at the same rate, they aren’t looking up anytime soon either. Due to the chain’s original business model of a sit-down establishment, it has continuously fallen behind in the takeout/delivery world we’ve shifted to since the pandemic and in comparison to competing companies. In mid-2022, Pizza Hut reported its U.S. same-store sales had declined 6%, which is a considerable comeback back from nearly going bankrupt in 2020. Is it the absence of delivery drivers that is turning customers away or is it the rise in pizza prices without the addition of better-quality ingredients? We’ll have to find out if the pizza chain decides to come up with new strategies moving forward, and hopefully in ways that help close all of the gaps.
1. Uno Pizzeria & Grill
Business at the Chicago-based chain decreased steadily between 2018 and 2020, reaching a crisis point during the pandemic: sales plummeted by 28.5% and the store count hit a low of 86 restaurants. Currently, Uno is plotting a comeback, with plans to transform its footprint with a new, streamlined restaurant that will focus more closely on pizza, as opposed to other creations like burgers and wings, which started taking over the menu. They’re also hoping to cut down the prep time for their famous deep-dish pizza, which currently takes about 45 minutes to make.
Sbarro’s declining sales predate the pandemic by a long shot. Revenue at the food-court chain dipped by more than 10% in both 2015 and 2016. And after a modest recovery in 2017 and 2018, the chain lost its footing again in 2019 and 2020, with sales decreasing over 18% during the pandemic. One of the causes of Sbarro’s loss of business in the past few years—besides the declining popularity of malls—may be the quality of its product. Customers just aren’t as thrilled as they once were with pre-made, heat-lamp-warmed pizza.
3. California Pizza Kitchen
The California-based chain struggled mightily during the pandemic: plans for expanded franchising were scuttled as the chain was driven into bankruptcy by sales losses of 35%. From a high of 300 restaurants in 2018, CPK’s footprint is currently down to fewer than 200 units, with only 150 in the U.S. The pizza chain emerged from bankruptcy in late 2020, but, not long after, began searching for a buyer. As of last July, the company’s debts totaled $177 million.