Yum! Brands is considering selling Pizza Hut. The chain has seen several quarters of declining sales at its U.S. locations, a market that accounts for 42%. its global sales. The US is “dragging the company down” even though sales in some other markets are growing, writes the BBC.
“Pizza Hut's results highlight the need for additional action to help the brand realize its full value, which can be better achieved outside of Yum! Brands,” CEO Chris Turner said in a statement on Tuesday, as quoted by the BBC. He added that “strategic options” are being analyzed.
Pizza Hut, whose sales in existing sales points decreased by 1% in the last quarter. , lags behind other major brands in Yum!'s portfolio. — KFC and Taco Bell, known for low meal prices, are showing signs of growth.
Sales at Taco Bell locations increased by 7%. in the last quarter, while sales in KFC outlets increased by 3%. , despite recent problems in the US.
See also: 1,200 employees of a popular pizzeria chain in the UK will lose their jobs
Pizza Hut is losing customers
Yum! generates approximately 11 percent its operating profits from operations in Pizza Hut. The company runs approximately 20,000 Pizza Hut restaurants around the world, of which approximately 6,500 are in the United States.
Competitors in the pizza market, such as Papa Johns and Domino's Pizza, are gaining market share, which contributes to Pizza Hut's problems staying competitive. Last month, Domino's reported that its quarterly sales increased 6%. , which management partially attributed to promotions.
Yum! did not specify when the company would decide on the future of the Pizza Hut brand.
Inflation is hitting sales at Pizza Hut
In addition to competition in the pizza industry, Yum is struggling with declining consumer spending, weighed down by persistent inflation and a slowdown in the labor market.
The trend of cautious spending has affected the entire fast food restaurant industry in recent months. Last week, an executive at burrito chain Chipotle said younger consumers in particular were showing signs of strain amid unemployment and loan defaults. In a call with analysts on Tuesday, Mr. Turner of Yum! described American consumers as “cautious but extremely resilient.” He added that spending at Taco Bell remains stable despite macroeconomic pressures.
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Source: BBC
