Up to 300 Pizza Hut restaurants will be closed, most of them dine-in locations not well-suited for carryout and delivery at a time when millions of people are sheltering and eating at home.
Franchisee NPC International said Monday in documents filed in bankruptcy court that it had agreed with Pizza Hut to close hundreds of locations. The Leawood, Kansas, company filed for bankruptcy protection last month.
Pizza sales have exploded during the pandemic. Domino’s, the nation’s largest pizza chain, last month reported a 30% spike in quarterly profits. On Monday, the company said it plans to hire more than 20,000 people to handle surging orders.
Other restaurant chains have also been on a hiring spree at a time when U.S. unemployment exceeds 10%. Rival pizza maker Papa John’s is also recruiting thousands of new workers, while McDonald’s said in June that it needs about 260,000 employees to staff its locations over the summer.
NPC owns 1,225 Pizza Huts and 385 Wendy’s restaurants in 27 states. There are currently 7,000 Pizza Hut restaurants in the U.S.
In its filing, NPC said that closing stores not designed for pick-up or delivery will allow it to invest in smaller stores that can better handle online orders.
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In May, Pizza Hut’s U.S. carryout and delivery sales reached an eight-year high, according to Yum Brands, the Louisville, Kentucky, restaurant giant that also owns KFC and Taco Bell.
But Pizza Hut’s U.S. systemwide sales grew just 1% in the April-June period. Domino’s Pizza, which has smaller, carryout-focused stores, posted a 20% jump in U.S. sales.
Domino’s said orders are growing during the pandemic as Americans continue hunkering down at home. The company’s revenues have continued to climb even as the economy sags, reaching $920 million in the second quarter and topping Wall Street forecasts.
Yum Brands in a prepared statement said the stores being closed had underperformed others owned by NPC, and that shedding them would strengthen NPC’s remaining portfolio.