Papa Johns Should Stick to Making Pizzas, Says CEO

Instead of diversifying its menu, Papa Johns should stick to making pizzas that are consistent day in and day out for customers, says the company’s CEO Todd Penegor.

In an investor meeting, Penegor, the former CEO of Wendy’s, said the pizza chain should focus on producing its core pizza products. This comes after Papa Johns’ menu changes haven’t indicated stronger sales for the fast-food restaurant.

As reported by QSR, Penegor told investors, “We’ve added a lot of complexity over the last many years. We’ve brought a lot of product on. It’s driven short-term sales and brought in new users, but it’s not driving the frequency we need, which a core pizza can do day in and day out.”

“It is a brand that’s been through a lot,” said Penegor, who was named CEO earlier this year, according to Restaurant Business. “If you think about the last seven years, right? We had a founder challenge. We had some leadership changes. We rolled into a pandemic. We rolled into an unbelievable inflationary environment. We had some more leadership changes. And we had some international disruptions with all the conflicts out there.”

He added, “The brand has been resilient. The brand is not broken by any stretch of the imagination.”

Streamlining Is Key To Driving Papa Johns Sales in the Future

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Todd Penegor told investors, per PMQ, “As I’m working in the restaurants, we’re cranking out a lot of great pizzas, and then, all of a sudden, some unique product or topping was put out there, and it takes us away from making a great [core] pizza.”

He insists that Papa Johns should “simplify” and focus on “consistency and efficiency” to ensure their product comes out perfect each time. He also said that there was too much variability in the chain’s baking processes from store to store. This affected product consistency, which could cause the company to lose its loyal customer base.

Penegor addressed a basic problem that should help along with streamlining. He wants to ensure all ovens work to their fullest potential, suggesting that they be recalibrated to ensure each pizza meets Papa Johns’ quality standards. “New offerings actually bring in customers, but great pizza drives frequency, and we’ve got to get back to driving great pizza with every visit to drive that frequency and the connection to our brand,” Penegor said.

The company will also continue to revamp its loyalty program to make it more user-friendly. Penegor wants to ensure that customers can earn rewards faster and wants the program to better personalize offers to keep loyal customers coming back.  One major change to its loyalty program was to shift from a $75 spend threshold to a lower threshold. Customers who spend $15 with the chain earn about $2 in Papa Dough. This promotional shift has helped drive the proportion of customers ordering through its loyalty program from about 20% to about 50%.

“We understand the importance of building a program that innovates ahead of the category,” he said. “Our loyalty program must be flexible and easy to understand to create strong, emotionally connected consumer engagement that seamlessly integrates with our creative, paid, earned, and owned messaging.”

Most importantly, Penegor believes the greatest impact of all these planned changes will come from getting a customer to make a second purchase faster, therefore shrinking the gap between visits. Retaining customers once they’ve been enticed by a product will continue to help Papa Johns’ bottom line.

As of Sept. 29, there were 3,454 North American stores and 2,454 international for a total of 5,908 locations.