Pizza seems like the perfect food for challenging economic times.
\nIt\u2019s cheap compared to most lunch and dinner options, and it both travels well and works great as leftovers. But the overall pizza business has struggled.
\n\u201cThe headlines are not kind to pizza right now. Pizzerias have fallen from Americans\u2019 favorite restaurant category to sixth place, trailing coffee shops and Mexican restaurants. Restaurant counts have been declining since 2019,\u201d according to Nation\u2019s Restaurant News (NRN).
\nIt\u2019s not one thing hurting the industry. Inflation has led to customers ordering less often, and third-party delivery services have cut into margin, while taking valuable data that used to belong to the pizza chains.
\n\u201cThe result is visible in the numbers. Consumers are ordering smaller pizzas with fewer toppings, franchise owners are watching margins compress from both ends, and structural shifts like the rise of GLP-1 medications are quietly pulling portion sizes and order frequency down further,\u201d NRN added.
\nThat has forced a number of national pizza chains, including Papa John\u2019s and Pizza Hut, to close hundreds of restaurants. Now, another national pizza chain, Papa Murphy\u2019s, has decided to close 68 restaurants.
\nPapa Murphy\u2019s closing restaurants
\nPapa Murphy\u2019s uses a different business model than traditional pizza chains. Instead of delivering hot, fresh pizza, the chain sells take-and-bake pizzas that customers have to cook at home.
\nThe company shared an explainer of its business model on its website.
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\u201cAs the franchisor of the largest Take \u2018n\u2019 Bake pizza brand, we aim to provide our guests with unparalleled service, quality, and innovation so they can create the best at-home meal experience. We also believe that pineapple belongs on pizza. In fact, we believe whatever you want on your pizza belongs on your pizza,\u201d the chain shared.
\nIt\u2019s a challenging model, since customers still have to cook the pizza once they take it home, but that has not stopped Papa Murphy\u2019s from growing to more than 1,000 locations across 34 states, according to the company\u2019s store locator page.
\nNow, however, the chain has decided to shrink its portfolio.
\n\u201cAs part of our ongoing efforts to improve the quality and profitability of the business, we recently completed a detailed review of our corporate-owned store portfolio. Following that review, we\u2019ve made the decision to close 68 underperforming corporate-owned stores,\u201d CEO Eric Lefebvre shared during the company\u2019s second-quarter earnings call.
\nSome of the locations are scheduled to close as early as next week, while the entire shutdown plan will take between six and nine months to complete.
\n\u201cThis was a store-by-store process where we evaluated the performance outlook and economic profile of each location. Where we saw a path to improvement, we chose to continue investing efforts into making our existing assets as productive as they can be. Where the fundamentals no longer supported that path, we made the decision to close the store, he added.
\nThe impacted stores lost over $10 million in the past 12 months, and Lefebvre said their \u201cperformance was, for the most part, deteriorating.\u201d
\nPapa Murphy\u2019s has joined Pizza Hut and Papa John\u2019s in closing restaurants.
\nShutterstock<\/p>\n
Papa Murphy\u2019s is not alone
\nPizza chains face a number of challenges that have impacted profitability.
\n\u201cLabor costs average 23-28% of sales across the industry, and the average hourly wage rose 3.86% in 2025, with no indication of stabilizing. Ingredient costs are up broadly, with tariffs adding unpredictability to supply chains that operators were already managing on thin margins,\u201d according to NRN.
\nThe growth of third-party delivery has posed challenges as well.
\n\u201cWith 64% of customers now preferring to place orders digitally, operators who lack a first-party ordering channel are handing that relationship to a third party along with the margin and the data equity that comes with it,\u201d NRN added.
\nThat has led to major chains struggling. Papa John\u2019s, for example, has seen sales drop.
\n\u201cNorth America comparable sales decreased 6.4% from a year ago as comparable sales from Domestic Company-owned restaurants were down 5.2% and North America franchised restaurants were down 6.7%,\u201d according to the company\u2019s first-quarter earnings report.
\nThe chain plans to close around 300 locations.
\n\u201cWe are making progress on our previously announced efforts to address locations that are failing to meet brand standards, lack a clear path to sustainable improvement or represent an opportunity for strong sales transfer to nearby restaurants,\u201d CFO Ravi Thanawala said during the company\u2019s first-quarter earnings call.
\nPizza Hut, which was just sold by Yum Brands, according to CNBC, has also been closing locations.
\n\u201cIn the first half, in the U.S., we expect approximately 250 targeted closures of underperforming units tied to the Hut Forward program, which will result in a decline in global Pizza Hut units in the first half,\u201d Yum Brands CFO Ranjith Roy said during the chain\u2019s fourth-quarter earnings call.
\nDomino\u2019s has been the pizza leader
\nDomino\u2019s posted a modest 0.1% same-store sales increase in the second quarter, but CEO Russell Weiner thinks the numbers are better than they look.
\n\u201cIn the second quarter, Domino\u2019s drove meaningful order count growth,\u201d he said in the Q2 earnings release.
\nThat, he noted, is a more important sign than growing the bottom-line sales number.
\n\u201cI believe order growth is the most important driver of long-term success in our business. In a quarter where the broader U.S. QSR industry continued to face pressure on consumer demand, Domino\u2019s generated order count growth across both our delivery and carryout businesses, bringing millions of new customers to our brand,\u201d he added.
\nDomino\u2019s has been winning because it has focused on value over everything else, RTMNexus CEO Dominick Miserandino told TheStreet.
\n\u201cFast-food pizza used to be the ultimate, cheap Friday night family luxury. When a delivery order for a family of four at a standard chain starts pushing past forty or fifty dollars, it completely breaks the value,\u201d he said.
\nDomino\u2019s, he added, has long accepted that its business revolves around selling acceptable pizza cheaply. That niche gives the company a clear identity in the struggling pizza space.
\nBTIG analyst Peter Saleh sees Domino\u2019s as the clear category winner.
\n\u201cWe think Domino\u2019s is executing its domestic strategy brilliantly, gaining market share and driving traffic with all income groups, while the broader industry is struggling,\u201d Saleh told Yahoo Finance.
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