Pizza Hut’s Parent Company Considers Selling the Chain
Pizza Hut may soon be put up for sale. Yum Brands, the parent company of Pizza Hut, announced on Tuesday that it is formally reviewing strategic options for the brand amid fierce competition in the pizza market.
Strengths and Current Position
Yum CEO Chris Turner highlighted Pizza Hut's notable advantages, including its expansive global presence and strong sales growth in several regions. The chain operates nearly 20,000 stores across more than 100 countries.
International and U.S. Performance
- International sales increased by 2% in the first nine months of this year.
- China ranks as Pizza Hut’s second-largest market outside the United States.
- Nearly 50% of sales come from the U.S., where approximately 6,500 stores operate.
- However, U.S. sales declined by 7% during the same period.
Challenges Faced by Pizza Hut
The brand has struggled due to its large, older dine-in restaurant model, which conflicted with growing consumer demand for fast pickup and delivery services.
"Pizza Hut was long saddled with large, outdated dine-in restaurants at a time when consumers wanted fast pickup and delivery."
In 2020, one of its biggest franchisees filed for bankruptcy and shuttered 300 locations, highlighting operational difficulties.
Market Share Decline
Pizza Hut’s share in the U.S. pizza chain market dropped from 19.4% in 2019 to 15.5% recently, according to food service consultant Technomic.
"Pizza Hut now controls 15.5% of U.S. pizza chain sales, down from 19.4% in 2019."
This ongoing review may lead Yum Brands to explore new directions for Pizza Hut, including a potential sale.
Author's summary: Pizza Hut faces declining U.S. sales and market share despite global growth, prompting its parent company Yum Brands to consider selling the iconic pizza chain.
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