How competitive is the pizza restaurant segment? Very. Statista recently reported that the number of pizza restaurants in the US will top 78 thousand in 2020. A crowded market.
Domino’s, Pizza Hut, Little Caesars, and Papa John’s are all doing well. Everyone’s favourite comfort food during the pandemic, and sales growth has lasted well into 2022. For example, Papa John’s recently reported over 11% revenue growth, earning it NASDAQ’s “long-term” growth stock status.
Smaller chains and independent restaurants haven’t had it as easy. The major chains accounted for over half of the $46 billion in pizza sales in 2020. Regional franchises and mom-and-pops must scrape for scraps.
Smaller chains have had it especially tough. While large pizza chains did well during the pandemic, Statista reports that many smaller chains saw sales decline. Here are four chains that are struggling with sales and losing customers.
Sbarro’s declining sales far predate the pandemic. In both 2015 and 2016, the food court chain’s revenue fell by over 10%. After a modest recovery in 2017 and 2018, the chain lost ground again in 2019 and 2020, with sales falling over 18%. Aside from declining mall popularity, the quality of Sbarro’s product may be a factor in its recent decline. Pre-made, heat-lamp-warmed pizza isn’t as popular as it once was.
Uno Pizzeria & Grill
Between 2018 and 2020, sales at the Chicago-based chain fell by 28.5 percent, and the chain’s store count dropped to 86. Uno is currently planning a comeback, with a new, streamlined restaurant that will focus more on pizza than other creations like burgers and wings, which started taking over the menu. A 45-minute prep time for their famous deep-dish pizza is also on the agenda.
Before the pandemic, Papa Gino, like Sbarro, was struggling. After “careful review and analysis,” the chain’s parent company closed 95 restaurants across the country in November 2018, laying off 1,100 people. The pizza chain declared bankruptcy soon after, owing between $50 and $100 million. It didn’t help that a Boston Globe food critic panned almost the entire Papa Gino’s menu at the same time.
Currently owned by New England Authentic Eats, LLC, the brand was acquired by Wynnchurch Capital in 2019.
Papa Gino’s has recently remodeled some stores and invested in third-party delivery services. However, with only 81 locations, the chain isn’t quite endangered, but it’s close.
California Pizza Kitchen
During the pandemic, the California-based chain’s sales fell 35%, halting plans to expand franchising. From 300 restaurants in 2018, CPK now has less than 200, with only 150 in the US. After emerging from bankruptcy in late 2020, the pizza chain began looking for a buyer. The company owed $177 million as of July.