Domino’s is nearly twice the size of Pizza Hut after passing the chain nearly a decade ago. | Photo: Shutterstock.
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We recently wrote about whether Pizza Hut made a mistake by ditching its full-service concept for a takeout and delivery model. And then its parent company, Yum Brands, announced that 250 of the chain’s U.S. units would close as executives figure out what to do about the brand.
Over the past 20 years, Pizza Hut’s sales have stagnated, while rival Domino’s has thrived. The latter chain has long passed Pizza Hut to be the largest pizza chain in the U.S. and now is double in size.
Yet in wondering about Pizza Hut’s move away from full service, we may have missed a more obvious point: Takeout.
One of the sneakily strong strategies that Domino’s used to take over the pizza business was its store remodels, coupled with its “fortressing” strategy. Both moves prepared the company for what would ultimately hit the U.S. restaurant business, the advent of third-party delivery.
DoorDash, Uber Eats and the like enable consumers to order anything via delivery, removing the effective monopoly the pizza sector had on those customers. And while Pizza Hut and others are marketing on those apps, it’s difficult to make up for the loss of their in-house delivery.
But carryout has become more popular, particularly as consumers cut back on their spending. Domino’s remodeled stores, which feature some seating and order status boards for carryout customers, make them more friendly for such customers. And those customers do not have to travel as far to get to a Domino’s now because the chain has more locations.
As such, Domino’s sales through that channel have grown. Pizza Hut has tried a variety of things over the years to lift its sales but has been occupied with large, struggling franchisees and its continued shift away from full service. It may have missed an opportunity to build carryout sales.
This week’s financial news
A big Subway franchisee filed for bankruptcy, largely because it took out merchant cash advances. Big mistake.
So long, Bahama Breeze.
Taco Bell continues to kill it, because that is what Taco Bell does. On the other hand, Chipotle is decidedly not killing it these days. So we wrote about the chains’ very different 2025.
Yum Brands bought Habit Burger to get itself a growth chain. But it barely did that last year and now the chain is not even mentioned on the company’s earnings calls.
Oh hey, Bob Evans has been sold.
McDonald’s continues to tout its impact on the U.S. economy.
Burger King didn’t keep its China business for long.
Cracker Barrel went viral for another bad reason.
Number of the week
The following graphic shows the growth in system sales by year at Habit Burger since Yum Brands bought the chain. It isn’t getting much of it.
Quote of the week
“The continued cash drain caused by the weekly and daily draws has been the primary cause of [MTF’s] financial problems.” -Michael Fay, CEO of Subway franchisee MTF Enterprises, on the Subway franchisee’s use of merchant cash advance financing and its impact on its bankruptcy.
On the blog
I wrote about the use of MCAs, Pizza Hut, Mexican chains and Habit Burger. Check out all my blog posts on The Bottom Line.
On the podcasts
On A Deeper Dive we talked about the state of the retail foodservice sector. On The Week in Restaurants we talked about Chipotle, Yum Brands and Subway.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.
