Upstart restaurant chains are facing challenges in their bid to unseat Domino's Pizza and Pizza Hut as the dominant pizza restaurants in the United States. The upstart restaurant chains, including Pie Five and Toppers Pizza, are facing a tough time trying to sell their pizzas using the fast-casual strategy.
According to a Bloomberg News report, Pie Five will be closing some stores in Illinois, Colorado and Minnesota. Toppers Pizza has also decided to shutter four stores in Chicago. The closures will affect several employees. Although it has not been explicitly stated by the companies themselves, store closures usually mean a loss of jobs.
Other fast-casual chains like Panera Bread Co. and Shake Shack Inc. have been successful in expanding nationally. However, pizza startups that are looking to duplicate the trend are finding it difficult to do so.
While the reasons may vary per company, an analyst at an analyst at Bloomberg Intelligence, Michael Halen, posited that the pizza startups may be facing challenges in expanding because they might be choosing locations wherein there are mom-and-pop places that have already established a strong customer base in the area.
In Pie Five's case, the company said its sales took a hit from the current market environment as well as increasing competition. Dallas News reported that Pie Five has fully exited Minnesota after closing all of its locations within the state. In the Chicago area, only one Pie Five location remains open.
Toppers Pizza, meanwhile, has decided to exit markets where it does not see potential growth opportunity. The company decided to focus on its strong locations in states like Minneapolis and Indiana.
While Pie Five and Toppers Pizza struggle, Domino's continue to lure customers. Domino's has invested in mobile-ordering technology and has offered discounts in order to boost its sales.
In another food-related news, Jobs & Hire previously reported that cereal maker General Mills also reported lower sales.