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 stiff competition in the pizza market.
Strengths and Challenges
Yum CEO Chris Turner highlighted Pizza Hut’s key strengths, such as its global presence and solid growth in many regions. The chain operates nearly 20,000 locations across more than 100 countries. International sales increased by 2% during the first nine months of the year, with China being the second-largest market outside the U.S.
However, nearly half of Pizza Hut’s sales come from the U.S., where it has about 6,500 outlets. U.S. sales declined by 7% during the same period.
Market Dynamics and Historical Issues
Pizza Hut has struggled due to its reliance on large, traditional dine-in restaurants, contrasting with the current consumer preference for fast pickup and delivery.
- In 2020, one of the largest Pizza Hut franchisees filed for bankruptcy and subsequently closed 300 stores.
- The brand’s share of U.S. pizza chain sales dropped from 19.4% in 2019 to 15.5% recently, according to food service consultant Technomic.
“Pizza Hut has many strengths, including a global footprint and strong growth in many markets,” said Yum CEO Chris Turner.
Photo caption: Pizza Hut location in Taunton, Massachusetts, July 9, 2015. (AP photo)
Summary
Despite a strong international presence, Pizza Hut faces challenges in the U.S. market that have led Yum Brands to explore potential sale options.
Author’s summary: Pizza Hut’s global brand remains strong, but declining U.S. sales and changing consumer habits have prompted Yum Brands to consider selling the chain.