Yum! Brands is exploring a possible sale and other “strategic options” for its struggling Pizza Hut division, reported The New York Times.
“While global sales at Taco Bell and KFC have been booming, Pizza Hut has been a drag on Yum’s performance for some time, as it has lost market share in the competitive pizza market,” NYT wrote.
Pizza Hut has “a unique opportunity to reclaim the leading position in the highly fragmented pizza market,” Chris Turner, the chief executive of Yum, said this week to analysts and investors. “We believe a different approach, including but not limited to a sale of the business, would allow Pizza Hut to realize its full potential.”
Pizza Hut is the second-largest pizza-restaurant operator in the U.S., with $5.6 billion in domestic sales across about 6,560 stores last year, according to market-research firm Technomic. Around 20,000 Pizza Hut stores are in operation worldwide, per The Wall Street Journal.
“Pizza Hut has had trouble standing out in the crowded pizza market. While sales have increased in some of its international markets, the U.S. has dragged down overall performance. On Tuesday, it reported its eighth consecutive quarter of same-store sales declines. Roughly 42% of the pizza chain’s total sales come from the U.S…. Pizza Hut has sought to innovate, launching a Detroit-style pizza in 2021 and folded pizza melts geared toward the lunch crowd in 2022,” WSJ wrote.
The challenges facing Pizza Hut come as other parts of Yum Brands are showing growth. Taco Bell posted a sharp increase in sales in the most recent period, with same-store sales growing 7% in the three months ended September 30.
In September, NACS Daily reported that Taco Bell has been focusing on chicken and experiential beverages. Taco Bell’s Chief Executive Sean Tresvant plans for those items to play a bigger role in Taco Bell’s business by focusing on marketing efforts to younger consumers.