Pizza has traditionally been the cheap option, a food that’s light on the wallet and can be shared by multiple people. You might not be able to afford a sit-down restaurant, but pizza has always been a comforting option even during challenging times.
That has changed as Americans are still eating pizza, yet increasingly turning away from chains like Papa John’s and Pizza Hut.
“Taste, value, convenience and variety are prime factors in capturing potential pizza customers, according to Technomic’s 2025 Pizza Consumer Trend Report. But the research firm’s data show that the average price of a pizza is $17.61, up 3% year over year and more than 15% in the last five years,” Restaurant Business reported.
Those price hikes, the research showed, have had an impact on pizza sales, with 35% of consumers ordering restaurant pizza less frequently because it has gotten too expensive.
In addition, some consumers have shifted away from restaurant pizza.
“While food-service remains dominant with nearly two-thirds ordering carryout monthly, delivery has declined from 61% in 2022 to 55% in 2025,” according to the 2025 Technomic Pizza Consumer Trend Report. “The most telling shift: 25% of consumers report eating more frozen pizza instead of restaurant options due to price increases.”
Those trends have created challenges for pizza chains. Pizza Hut has announced plans to close about 250 restaurants, while rival Papa John’s recently closed 44 locations and expects to shut down more than 250 additional stores.
Papa John’s has seen its sales drop
The pizza industry has been fighting for growth for a couple of years.
“In 2024, the pizza segment struggled significantly, with Technomic’s Top 500 Restaurants data showing 61% of pizza chains experienced declining sales. Only one pizza brand — Fort Worth-based pizza buffet chain Mr. Gatti’s Pizza — managed to achieve double-digit growth,” according to Nation’s Restaurant News.
Papa John’s has been hit hard by that downturn.
“North America comparable sales decreased 6.4% from a year ago as comparable sales from Domestic Company-owned restaurants were down 5.2% and North America franchised restaurants were down 6.7%,” the company shared in its first-quarter earnings release.
That followed a full-year decline in 2025.
“North America comparable sales decreased 2% as Domestic Company-owned restaurants were down 3% and North America franchised restaurants were down 2%,” the company shared in its fourth-quarter 2025 earnings release.
Papa John’s and Pizza Hut closing 100s of underperforming locations
Papa John’s has been aggressive in its efforts to return to same-store sales growth. Those efforts include shutting down stores that are not performing.
“We are making progress on our previously announced efforts to address locations that are failing to meet brand standards, lack a clear path to sustainable improvement or represent an opportunity for strong sales transfer to nearby restaurants,” CFO Ravi Thanawala said during the company’s first-quarter earnings call.
The company defines sites marked for closure primarily as decade-old franchise units whose average unit volume (AUV) is below $600,000 and that predominantly generate negative EBITDA.
More pizza industry coverage:
- Pizza Hut closing 250 stores, faces $100 million lawsuit
- 50-year-old pizza chain closes all restaurants, files Chapter 7
“During the first quarter, we closed 44 of the 300 identified locations,” Thanawala added. “Early results are encouraging as we have observed a strong transfer of sales to neighboring restaurants.”
Pizza Hut, which is being shopped for a potential sale by its parent company Yum Brands, has a store closure plan similar to its rival’s.
“In the first half, in the U.S., we expect approximately 250 targeted closures of underperforming units tied to the HUD forward program, which will result in a decline in global Pizza Hut units in the first half,” Yum Brands CFO Ranjith Roy said during the chain’s fourth-quarter earnings call.
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Domino’s has the answer
“Fast-food pizza used to be the ultimate, cheap Friday night family luxury. When a delivery order for a family of four at a standard chain starts pushing past forty or fifty dollars, it completely breaks the value. Consumers are looking at those prices, realizing they can get a vastly superior product from a local independent shop,” RTMNexus CEO Dominick Miserandino said.
Domino’s has long accepted that its business revolves around selling acceptable pizza cheaply. That niche gives the company a clear identity in the struggling pizza space.
BTIG analyst Peter Saleh sees Domino’s as the clear category winner.
“We think Domino’s is executing its domestic strategy brilliantly, gaining market share and driving traffic with all income groups, while the broader industry is struggling,” Saleh told Yahoo Finance.
The chain’s sales grew in the U.S. by 0.9% in Q1, according to the company’s first-quarter earnings release, while they climbed by 3% in fiscal 2025, Domino’s shared in its fourth-quarter earnings release.
Domino’s CEO Russell Weiner noted that competitors have increasingly embraced value, but remained confident that they can’t truly compete.
“Competition within the QSR pizza space also increased in Q1 as the national pizza players offer deals comparable, if not identical, to the renowned value Domino’s has made famous. While this created some short-term pressure, we believe Domino’s wins in the sustained value environment,” he said during the pizza giant’s first-quarter earnings call.
He explained how Domino’s can offer low prices while still being profitable.
“Our advantage is profit power, the ability to offer compelling ongoing value while driving profit growth for Domino’s franchisees. Our industry-leading advertising budget drives the order counts needed to make this value model work profitably over time. Our pizza competitors simply don’t have that same capability,” Weiner added.
Price is not the only factor in the pizza sales wars
PMQ Pizza Editor-in-Chief Rick Hynum sat down for an interview with TheStreet and said that while price isn’t the sole driving factor in the chain pizza space right now, it’s huge.
“We’re also seeing the leading chains introduce more specialty pizzas lately, like Domino’s Parmesan Stuffed Crust and Pizza Hut’s Crispy Parm Pan pizza. So the chains are getting out of that menu rut they were in for so long, trying to show that they’re more than just cheap fast-food pizza,” he said.
Value, he added, isn’t just about price.
“It’s about perceived quality of the product, too, and speed and convenience — and nowadays you can get cheap, fast pizza just about anywhere, including at that convenience store that’s on your way home from work. So the chains have to find a way to stand out in other ways, too,” Hynum said.
Domino’s, he added, has not just built its model around being cheap.
“But, yes, price is super important, especially for Domino’s and especially in this economy. They’ll probably keep bringing back their 50% off discount promotion throughout the year just like they did in 2025. But keep in mind, for Domino’s, that’s more about driving loyalty membership and pulling more and more customers into their orbit so Domino’s has top-of-mind awareness with their app on every phone,” he said.
Papa John’s has not done that as well the pizza publication editor shared.
“That’s the real stroke of genius for Domino’s. And although we’ve seen Papa Johns make strides with its own loyalty program, no one can touch Domino’s in that respect,” he added.
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