The fast food retail chain, Pizza Hut, decided to reduce and change its current store models from dine in to “modern express stores” over the next two years, according to National Restaurant News.
The chain will look into more than 500 low-performing stores and replace them with newer carryout stores that will better serve its customer base nationwide.
“We are leaning in to accelerate the transition of our Pizza Hut U.S. asset base to truly modern delivery/carryout assets,” said David W. Gibbs, president, chief operating officer and chief financial officer for Yum! Brands, in an Aug. 1 earnings call to Al news. “This will ultimately strengthen the Pizza Hut business in the U.S. and set it up for a faster long-term growth.”
According to Al News, Pizza Hut has more than 6,100 traditional-style restaurants and 1,350 express units nationwide. Gibbs told Al news that this could bring the brand’s store count close to 7,000.
“Our U.S. store count could drop to as low as 7,000 locations over the next 24 months primarily driven by closures of underperforming dine-in restaurants before rebounding to current levels and above in the future,” Gibbs told National Restaurant News.
Yum! CEO Greg Creed told National Restaurant News he was pleased with Pizza Hut’s results.
“Same-store sales growth in the U.S. will continue to be choppy without transforming the asset base,” Creed said during Yum’s earnings call to National Restaurant News. “We plan to lean into accelerate the transition of our Pizza Hut U.S. estate to a more modern delivery and carryout focused asset base. This will ultimately position the Pizza Hut brand for many years of faster growth in the U.S.”
Fox News suggests the move to express locations will push Pizza Hut’s delivery services, with the chain encouraging franchisees to replace their under-performing dine-in stores with express, newer model stores.
Fox Business suggests that the brand’s partnership with Grubhub has supplied some growth in delivery customers in which customers order through the Grubhub app, but a Pizza Hut driver still makes the delivery.
“Pizza Hut also has its own online ordering system,” Fox Business reported. “The chain also recently tested an in-store digital ordering system that lets customers order and pick up food without talking to a single person.”
In 2018, Pizza Hut acquired QuikOrder, an online ordering software and service provider for restaurants, in a possible attempt to shift toward more delivery purchases.
“We’re doubling down on our commitment to digital and this deal positions Pizza Hut perfectly for the future,” said Artie Starrs, President of Pizza Hut U.S. in the 2018 press release regarding Pizza Hut’s acquisition of QuikOrder. “We’re also gaining access to an immensely talented group of developers and digital innovators. Together we can more quickly provide breakthrough products and convenient services to our customers that will allow for better franchise economics over the long term.”