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This Pizza Giant Closed Hundreds of Restaurants This Year

The company has been on a restaurant closing spree.

Though takeout and delivery sales are booming, Pizza Hut is struggling with a large number of dine-in locations, which are putting it at a disadvantage during the pandemic. The chain has been on a closing spree this year, shutting down hundreds of locations in the U.S. and across the world in the ultimate push to shift its business off-premise.

Over the course of this year, a whopping 1,200 locations have shut down globally. Between July and September alone, 422 American restaurants shuttered, some of which were replaced with takeout and delivery locations. (Related: 9 Restaurant Chains That Closed Hundreds of Locations This Summer.)

A portion of the closures took place as a result of bankruptcy filings by Pizza Hut franchisees. For example, NPC International, which was Pizza Hut's largest franchisee with a fifth of the chain's U.S. footprint, filed for bankruptcy in August. The move left as many as 300 Pizza Hut locations slated for closure and the remaining 927 up for sale. The pizza chain has now confirmed that the 300 closures are largely completed and accounted for in its latest financial report.

In spite of the closures, Pizza Hut has experienced tremendous success with its takeout and delivery operations. Same-store sales for those two areas grew by 21% in the third quarter. David Gibbs, CEO of Pizza Hut's parent company Yum Brands, confirmed things were moving according to plan for the pizza giant. "Existing trends in the restaurant industry have just been accelerated," he said on the company's earnings call. "Like off-premise, like delivery, like ordering through tech. Pizza Hut is perfectly positioned for a lot of those trends."

Closures of underperforming dine-in locations are expected to continue across the globe, and it remains to be seen how many more restaurants may be shuttered in North America.

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Mura Dominko
Mura Dominko is a senior editor at Eat This, Not That!. Read more