Papa Johns Is Struggling: How It Plans To Make A Comeback

A third of Americans have reported reducing how often they eat at restaurants in 2024, including both dine-in and fast-food restaurants. Fast food has always been considered an affordable way to eat a hot burger or slice of pizza, but even popular chains like Papa John's have felt the effects of reduced customer spending. This year, the company saw an overall 3% decline in revenue, while all stores open for at least a year experienced a 6% reduction in sales (Restaurant Business). 

It's been a hard year for restaurants — big names, including Red Lobster and TGI Friday's, have filed for bankruptcy in 2024. Outside of Papa John's, fast-food chains, such as KFC, Pizza Hut, McDonald's, and Burger King, have also reported lower sales this year. Customers are spending less at restaurants because it's more expensive to eat outside the home – restaurant prices have increased a shocking 30% in the past 5 years (FRED Economic Data). 

This spike in restaurant prices might seem like restaurants price gouging customers, but they're really passing down increased costs on their end. Since 2020 and the pandemic, a wide variety of factors have caused restaurants to raise their prices to turn a profit, including rising labor costs, supply chain shortages, and increased rent. With these uncontrollable external factors at play, restaurants like Papa John's must innovate from the inside. 

Increased prices are the main reason diners cite for eating out less, and focusing on competitive pricing is part of Papa John's plan to bounce back. Low earners have reported reducing their dining budgets the most, so it's important that fast-food establishments continue to make their menus accessible to this demographic. 

Innovating the menu is also part of the chain's plan. For one, Papa John's has promised to improve the quality of its ingredients. The pizzeria hasn't explicitly shared what these changes will include, but providing consistently good food and new menu items are a part of this initiative. The idea here is to also include offerings that appeal to more demographics — maybe vegan cheese for the pizza or a gluten-free crust option?

In more good news for customers, Papa John's has shared that it will also be investing in technology to improve the customer experience. It's always a bummer when there's a mix-up on to-go orders or a problem in our favorite food delivery app, and the pizza chain will be working to improve the efficiency of online ordering. If you start seeing more of Papa John's, another key part of their strategy to bounce back is amping up their marketing efforts.