Everybody loves pizza, right? Or they did anyway. Pizza joints no longer dominate the U.S. landscape, now outranked by coffee shops and Mexican restaurants. The humble pie is just a little more humble these days.
America is “falling out of love with pizza,” said The Wall Street Journal. Sales growth at pizza places has “lagged behind the broader fast-food market for years,” and industry executives are unsure about the future. The parent company of the Pieology Pizzeria chain filed for bankruptcy in December, following the April filing by Bertucci’s Brick Oven Pizza & Pasta. Chains still made $31 billion in 2024, but pizza’s “dominance in American restaurant fare is declining.”
What went wrong for pizza? It can be difficult to innovate with such a familiar product, though there have been attempts. “No restaurant chain became the ‘Chipotle of pizza,’” said Restaurant Business. About 10 years ago, chains like Blaze Pizza, Pieology and Pie Five tried to bring a “fast-casual, customizable business model” to the business, offering “single-serve, customizable pies.” It did not work. MOD Pizza, the largest of the chains, has “flirted with bankruptcy” and is closing locations. “Quick-service” pizza restaurants like Pizza Hut, Papa Johns and Papa Murphy’s also saw “sales declines in 2024.”
Is pizza the only food sector in trouble? Casual restaurant chains of all stripes are “increasingly bifurcating” into a “handful of winners” and a much bigger group of losers, said NBC News. Operating costs are rising and forcing chains to raise prices to “maintain their profit margins,” which does not go over well with lower- and middle-class customers who face “growing financial instability amid a weakening job market.” That has created pain across the industry.
What next? “On the way down, at the moment, is Pizza Hut,” said Babson College’s Thought & Action entrepreneurship blog. Its owner, Yum Brands (also the parent company of Taco Bell and KFC), is “exploring a sale” of the chain. Pizza Hut is “old and tired,” said Ab Igram, the executive director of Babson’s Tariq Farid Franchise Institute. “Yum will focus on the brands that are doing well.”
But the weakness of big chains may be an opportunity for mom-and-pop shops. “The era of the chains is over,” said Loren Padelford, the chief revenue officer at Slice, and the “era of indie pizza is in full swing.” |