Why Papa Johns may be losing its competitive edge in the pizza segment

Papa Johns’ customers are spending less than they had previously, and when they do spend money on pizza, they are more likely to choose third-party aggregators over the company’s first-party delivery channels. This shift in mix balance was a primary driver behind the Atlanta-based pizza chain’s 2% decline in North America same-store sales, as well as revenue and overall sales deflation for the first quarter ended March 31, 2024.  

Sales from aggregator channels have grown to 16% this quarter, as compared with 12% the same quarter of 2023, meanwhile organic delivery has declined year-over-year, while carryout remains flat. This highlights the quandary operators face when utilizing third-party apps: they are crucial to pull in new and non-regular customers, but operators lose revenue from these transactions.