Like many other pizza chains across the country, Papa Johns (PZZA) is struggling to recover from a stubborn consumer trend that is harming its sales. In an effort to reverse this trend, its CEO has unveiled an ambitious plan to win back customers.
In the pizza chain’s first-quarter earnings report for 2025, Papa Johns revealed that its total revenues increased by about 1% year-over-year. However, its comparable sales in the U.S. declined by 3% year-over-year, despite opening 18 new restaurant locations in the region during the quarter.
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Amid this startling decrease in sales, Papa Johns predicts that for the rest of 2025, its comparable sales in the U.S. will either remain flat or increase by 2%, even though it plans to open 85 to 115 new restaurants this year.
Related: Domino’s Pizza suffers a startling loss as customers switch gears
In February, Papa Johns CEO Todd Penegor warned during an earnings call that the company is starting to notice that customers are tightening their spending, despite recent deals and discounts. He also flagged Papa Johns’ delivery business as struggling to resonate with customers.
“Organic or first-party delivery is where we are seeing the traffic loss,” said Penegor.
A delivery worker carries a Papa John’s pizza.
Image source: Bloomberg/Getty Images
Papa Johns CEO unveils plan to win back customers
During an earnings call on May 8, Penegor once again emphasized that the wallet of the consumer remains “challenged,” and even flagged that increased competition is also impacting sales.
“As we look at consumer confidence, it does remain challenged amid the economic and market volatility,” said Penegor. “We’re all talking about it. We all see it. We’ve seen intensification on competitive pressures in the promotional cycles. We’ve also seen some challenges on the lower-income cohorts.”
He also said that Papa Johns’ recent performance shows that it needs to improve its delivery experience for customers. He highlighted that as a solution to this problem, the company has partnered with Google Cloud to “enhance” the ordering and delivery experience by taking “personalization to the next level, leveraging the power of AI.”
Related: Pizza Hut struggles to reverse troubling consumer trend
“We know we can do delivery better,” said Penegor. “And leveraging our new partnership with Google, we will improve driver dispatch and routing, increase the accuracy of our delivery time estimates, and provide better driver tracking.”
Penegor also said that Papa John’s will refresh its advertising campaign by further highlighting the “quality, simplicity, and freshness” of its ingredients, which he believes will help boost sales.
“We’ll see over time whether the consumer (will) really pay for the quality of the ingredients,” said Penegor. “Clearly, it’ll always be a tiebreaker. And we think over time, as we execute well at the restaurant level, the spirit of ‘worth what you pay,’ the consumer will start to reward us for that work.”
Papa Johns’ main competitors are also struggling
Papa Johns isn’t the only pizza chain that saw a dip in sales and deliveries this year.
Last month, Pizza Hut, which is owned by Yum Brands, revealed that its system sales in the U.S. decreased by 7% year-over-year during the first quarter of 2025, despite introducing deals such as its Ultimate Hut Bundle and bringing back Cheesy Bites Pizza, a fan-favorite menu item, for a limited time.
“Pizza Hut is in a tough category right now in QSR (quick-service restaurants) in the U.S., and certainly the pizza category with everybody reporting negative sales is pressured,” said Yum Brands CEO David Gibbs during an earnings call on April 30.
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Domino’s Pizza also revealed last month that its U.S. same-store sales declined by 0.5% during the first quarter of this year.
The decrease in sales comes after Domino’s added a Parmesan Stuffed Crust pizza to its menu and later ran a limited-time promotion that offered customers who ordered menu-priced pizzas online 50% off their order.
Domino’s also noticed that fewer customers are choosing to have their orders delivered and are instead opting to pick them up in stores.
“Our delivery business continues to be impacted by macro pressures that are impacting the low-income consumer,” said Domino’s Pizza Chief Financial Officer Sandeep Reddy during an earnings call last month.
It is no surprise that consumers across the country have been avoiding fast food like the flu, since fast-food prices have increased by roughly 47% over the past decade.
A survey from Datassential late last year revealed that 46% of U.S. consumers have scaled back their spending on restaurant meals and dining out due to inflation and the increased cost of living. Also, 31% said they are opting to cook food at home in order to save money.
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