Papa John’s, one of the world’s most recognized pizza chains, continues to face headwinds in the UK market as it struggles to regain financial stability. The company has confirmed that it closed over 70 locations in 2024 following sustained losses—marking a pivotal moment in its strategy to streamline operations and aim for profitability by 2025.
The UK division of the US-based pizza giant reported a pre-tax loss of £21.8 million in 2024, further widening the gap since its previous year’s loss of £19.2 million. Revenue also declined, falling from £95.9 million in 2023 to £88.6 million in 2024. In stark contrast, the last profitable year for Papa John’s UK was in 2021, when it earned £8.1 million on a turnover of £102.3 million.
These figures underscore the severity of the challenges faced by Papa John’s in a post-pandemic economy. The Papa John’s brand remains popular, but shifting consumer behavior, rising commodity costs, and ongoing global disruptions have forced the company to reevaluate its footprint in the UK.
Papa John’s UK: Shrinking to Grow
To address its mounting losses, Papa John’s closed 74 underperforming restaurants while opening just seven new ones. This brings the total number of Papa John’s UK locations down to 457, a sharp decline from the 524 outlets reported a year prior.
Chris Phylactou, Managing Director of Papa John’s UK, spoke candidly about the company’s tough decisions during an episode of City AM’s Boardroom Uncovered. He emphasized that while job cuts were painful, they were necessary to protect the brand’s long-term viability.
“Having people lose their jobs is the last option for us,” said Phylactou. “We tried everything to keep the restaurants open. Unfortunately, many locations were in the wrong place, and their performance was unsustainable.”
The closures were part of a broader strategy to eliminate loss-making branches and redirect investment toward high-performing and strategically placed outlets.
A Path to Profitability?
Despite the grim numbers in 2024, there is a silver lining for Papa John’s. According to Phylactou, the division is “no longer losing money” on a day-to-day basis and is now on course to return to profit in 2025. The turnaround is attributed to streamlined operations, a renewed focus on customer experience, and better location selection.
“That’s because of the difficult decisions we made back then,” Phylactou added. “We held on longer than we should have, trying to turn businesses around, but ultimately it was the right call to close them.”
This cautious optimism suggests that Papa John’s UK is entering a rebuilding phase, one where quality takes precedence over quantity. The leadership’s focus now lies in enhancing operational efficiency, refining its delivery model, and staying agile amid fluctuating market demands.
What This Means for the Pizza Delivery Industry
The struggles of Papa John’s UK mirror a broader trend in the fast-food and casual dining industry, where companies are grappling with inflation, staff shortages, and evolving consumer preferences. As more people opt for value-driven options or cook at home, chains like Papa John’s must innovate or risk falling behind.
However, Papa John’s global brand strength, loyalty programs, and expanding digital platforms may offer it a competitive edge as it navigates this transition. Whether its 2025 profitability goals materialize remains to be seen, but the groundwork is being laid.
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