Pizza chain continues to rebound after lackluster years
Papa John’s comparable franchised sales in North America topped 35 percent in its 5th fiscal month (Period 5) ending May 24, according to preliminary data from the pizza chain’s latest COVID-19 business update. When domestic company-owned stores are included, Papa John’s comparable (comp) sales increased 33.5 percent. The data illustrates both the strength of the limited-service pizza category and the robust comeback taking place at Papa John’s.
Certainly LSR pizza chains have adapted quickly to limitations imposed with restaurant operations during the health crisis. Their results show pizza operations are well-suited to takeout business, and how consumers have become accustomed to delivered and pick-up orders within that restaurant space.
Domino’s, for example, reported 1.6 percent U.S. comp sales growth at company and franchised stores during the first quarter ended March 23, while many non-QSR chains reported negative comps. Since then, during the first period of its second quarter, comparable sales increased 7.1 percent at U.S. stores. In the first period of its second quarter (Period 4) ending April 26, Papa John’s also posted strong comp sales: North American comp sales surged 28.9 percent the month following its second quarter.
Due to robust business, pizza chains like Domino’s and Papa John’s have been hiring additional staff. In March, Papa John’s announced it was immediately hiring up to 30,000 staff members as the COVID-19 pandemic raged on. The same month, Domino’s announced it was hiring 10,000 new employees to meet demand.
Papa John’s has been seeing better financial results as it has pressed forward with new product innovation and brought in new management. During 2019, it fared much worse than competitors. Its comp sales growth in North America at the end of last year’s first quarter decreased 6.9 percent, so the Louisville, Ky.-based pizza chain’s baseline of comparison was also far worse than competitors. In contrast, Domino’s comp sales have been lapping much tougher numbers. In 1Q 2019, it reported 3.9 percent comp sales.
“Our teams continue to meet the needs of new and returning customers and their communities, while making health and safety our top priority,” said Rob Lynch, Papa John’s president and chief executive. “We entered the pandemic with strong growth and momentum, and are fortunate that our delivery and carry-out model has enabled us to meet an essential need for high quality food, safely delivered to consumers’ homes.”
Only 320, or 15.2 percent, out of its 2,100 international franchised stores have closed. These are primarily located in the Middle East, Latin America and Europe. Nearly all North American stores continue to operate in some fashion and the company’s CEO says the company is prepared for a safe reopening of on-premises dining. A few non-traditional stores remain closed in the university trade channel and in contract foodservice at stadiums.
Photo credit: Papa John’s (featured preview image)
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