Yum! Brands CEO says Pizza Hut needs tweaking

April 24, 2003

LOUISVILLE, Ky. -- Acknowledging Pizza Hut's battle to stop ongoing same-store sales declines, its parent company's chief executive said the world's largest pizza chain is headed for an overhaul.

According to a report in The Wall Street Journal, David Novak, CEO of Louisville-based Yum! Brands, which owns Pizza Hut, said customers "want a lot of food at an affordable amount," and Pizza Hut hasn't met that demand.

"We've not been on the mark giving value the customer has been looking for," Novak said during an April 24 investor teleconference.

Novak said Pizza Hut's "to do" list for changes includes focusing less on new products and playing on the strengths of its traditional (i.e. already successful) pizzas. A new advertising campaign will arrive in the second half of the year, and will focus on the legendary brand's heritage.

That move, Novak said, should help same-store sales turn positive in the second half of the year.

Novak admitted Pizza Hut lagged behind its closest competitors -- Little Caesars, Papa John's and Domino's Pizza -- in adding cinnamon sticks with pizza orders, but said it "was not that big of a deal."

He was positive about Yum's recent acquisition of recipe rights to dishes offered at the burgeoning Pasta Bravo chain. "We think we got a great deal," said Novak, regarding the $5 million deal. Fresh pasta dishes, he said, will be paired with Pizza Hut offerings in select markets this year.

Shares of Yum rose 6.6 percent on April 24, to trade at $24.95 on the New York Stock Exchange.

Topics: Marketing

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