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Yum! Tries to Reboot Slumping Pizza Hut

By Daniel B. Kline – Feb 7, 2020 at 11:28AM

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While the parent company has done well, its pizza division has struggled.

Yum! Brands (YUM -1.97%) Pizza Hut has struggled to find the right mix of product, convenience, and prize. The pizza chain saw same-store sales drop 4% in the fourth quarter for its U.S. stores.

The parent company clearly finds that number alarming and detailed a number of steps its plans to take to address the problem in its Q4 earnings call. Those moves include installing a new leadership team.

The interior of a Pizza Hut.

Pizza Hut has a new leadership team. Image source: Yum! Brands.

What changes is Pizza Hut making?

Kevin Hochman, who has been president of the sister brand KFC in the U.S. will take on the same role on an interim basis at Pizza Hut. George Felix, who led KFC's global marketing efforts, will join the pizza chain as Chief Marketing Officer and David Graves, another former KFC executive, will become Chief Brand Officer.

It's clear that Yum! wants to take what has worked for its fried chicken brand and port that over to its struggling pizza chain.

"Pizza Hut US continues to be a business in transition, and for the last three years we've made improvements in food quality, speed of service, our loyalty program and upgrading our technology for online ordering and delivery," said Yum CEO David Gibbs during the Q4 earnings call. "However, significant opportunity remains in three years."

Can Pizza Hut make it great again?

For nearly 20 years (not all in a row) Pizza Hut used "make it great" or "makin' it great" as its ad tag line. In recent years it has lost any sort of identity.

The KFC team has revitalized that brand with bold promotions, a reimagining of Col. Sanders, and focusing on value. Expect the new Pizza Hut leadership to focus on the same while building out the chain's delivery business.

 

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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