CURRENT Papa John’s CEO, Todd Penegor, delivered a candid assessment of the company’s strategy, admitting that continuous menu innovation is failing to deliver sustainable growth.
Speaking at an investor event on Thursday, Penegor raised the importance of returning to the brand’s roots: pizzas.
The CEO admitted some stark truths[/caption]
Papa John’s is best known for its high-quality pizzas, including its signature original crust.
Todd Penegor, who joined Papa John’s as CEO earlier this year, pointed to declining sales as a major concern.
“We’ve brought a lot of product on. It’s driven some short-term sales.
“It’s brought in new users, but it’s not driven the frequency that we need, which a core pizza can do day in and day out,” Penegor shared.
Comparable sales have dropped in recent quarters, with competitor Domino’s solidifying its position as the QSR pizza standout performer in 2024.
Penegor noted that orders for Papa John’s medium and large original crust pizzas accounted for about 75% of orders in 2019.
Today, however, that number is just 50%, a staggering decline Penegor attributes to the company’s menu additions and limited-time offers.
Fast Food meal deals
Here are some of the current value meals offered by popular fast food joints.
Taco Bell’s $7 Luxe Cravings Box:
- Chalupa Supreme
- Beefy Five-Layer Burrito
- Double Stacked Taco
- Chips and nacho cheese sauce
- Medium drink
McDonald’s $5 Meal Deal:
- McDouble or McChicken sandwich
- Four-piece Chicken McNuggets
- Small fries
- Small soft drink
Wendy’s $5 Biggie Bag:
- Junior Bacon Cheeseburger or Crispy Chicken Sandwich
- Four-piece chicken nuggets
- Junior fries
- Small soft drink
Burger King’s $5 Your Way Meal:
- Whopper Junior, Chicken Junior, or Bacon Cheeseburger
- Fries
- Four-piece chicken nuggets
- Soft drink
While menu innovation has attracted new customers, Penegor acknowledged that it has disrupted restaurant operations and detracted from the brand’s strength: high-quality pizzas.
Operational change due to menu additions “sometimes takes us away from making a great pizza,” he explained.
To address these issues, Papa Johns is simplifying operations along with its marketing calendar to refocus on core products.
Penegor made it clear, however, that innovation is not off the table entirely; further sharing, “We’re going to have to find the right balance, and don’t get me wrong, we’re not moving away from innovation.”
The company is also enhancing its loyalty program to better engage customers.
Previously, customers needed to spend $75 to earn rewards, but now spending $15 will earn you approximately $2 in Papa Dough, Papa John’s rewards currency.
