Fortune 500 company Yum! Brands, parent company of Pizza Hut has announced that they will temporarily close nearly 500 hundred under-performing Pizza Hut locations.
Yum! Brands is one of the world’s largest food companies, they have some 43,617 restaurants in over 135 countries and operates the brands Taco Bell, KFC, Pizza Hut, and WingStreet.
The CFO and COO of Yum! brand, David Gibbs, said the number of Pizza Hut stores in the U.S. could drop to as low as 7,000 as the brand shifts from traditional dine-in restaurants to concentrate on delivery-focused locations.
“At Pizza Hut, we are leaning in to accelerate the transition of our Pizza Hut U.S. asset base to truly modern delivery and carry-out assets,” he said. “This will ultimately strengthen the Pizza Hut business in the U.S. and set it up for faster long-term growth.”
Some of the closing under-performing locations will be re-franchised, remodeled or rebuilt at a better location. Currently, in the US about 6,100 Pizza Hut restaurants are dine-in, with less than a fourth of the brand’s locations being “express” units.
“Importantly, the short-term financial impact should be minimal,” Mr. Gibb said. “The closures will be lower-volume stores, and long-term, this should improve system sales and profitability as the closed units are replaced with higher volume stores.” He stated the closure will happen within the next 24 months, but didn’t offer details as to which locations will be impacted.
Is this strategy too little, too late for Pizza Hut? Previous we’ve discussed rival pizza delivery company Domino’s omni channel digital footprint. Pizza Hut is focusing on take out /delivery options late in the game. It will be interesting to see if they prevail. Even Domino’s with wide variety of order methods is struggling against third party delivery platforms such as DoorDash, GrubHub and Uber Eats.
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