The trend: Two of the US’ largest pizza chains—Papa John’s International and Yum Brands-owned Pizza Hut—may soon go private amid a challenging environment marked by intensifying competition, rising commodity costs, and shifting consumer behavior, per Reuters.

Why is this happening? Both chains have lost share in recent years, and both say they need to shutter hundreds of locations to revive returns. Operating outside the glare of public markets could give them more flexibility to restructure.

Papa John’s generated $2.05 billion in revenues last year, down slightly from the previous year, and about 4% below its 2023 peak. The company has cycled through multiple CEOs since founder John Schnatter’s 2018 ouster.

Pizza Hut’s results are also deteriorating, with US same-store sales down 3% last year, weighing on Yum’s earnings. A turnaround will likely require significant investment to modernize many dated locations, which would be easier to accomplish without the pressure of quarterly reporting, per Reuters.

While Pizza Hut and Papa John’s struggle to define their value proposition, Domino’s has doubled down on sharp, simple offers like its Emergency Pizza promotion and $9.99 any-pizza deal. That strategy has helped it take share from competitors.

Implications for restaurants: The industry faces mounting pressure as elevated gas prices eat into discretionary spending. That strain is showing up in the data, with QSR comp sales declining each week in March. In response, chains are sharpening their focus on value to give consumers a reason to order out rather than cook at home.

Pizza chains live and die by value and convenience—and right now, Domino’s has an edge on both. That leaves Pizza Hut and Papa John’s in a difficult position, pushing them to lean on new menu items—like Papa John’s pan pizza and Pizza Hut’s Hut Lover’s Pizzas lineup—to drive growth. But those efforts may fall short if the chains fail to address core value perceptions and compete with Domino’s simpler, sharper pricing.

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