Photo by Pablo Pacheco on Unsplash
Papa Murphy’s is preparing to close dozens of locations as the take-and-bake pizza chain struggles in an increasingly competitive restaurant market. Parent company MTY Food Group announced plans to shut between 45 and 50 Papa Murphy’s stores over the next six to nine months.
The closures come as the company reviews its portfolio of underperforming restaurants. According to MTY Food Group CEO Eric Lefebvre, Papa Murphy’s has faced growing pressure from competitors in the crowded pizza industry.
The company believes the store closures will help strengthen the brand over the long term, even though the move will temporarily reduce its number of locations.
Papa Murphy’s closures follow unsuccessful turnaround efforts
MTY Food Group previously took control of several Papa Murphy’s store groups in an effort to improve their performance. The company believed it could return those locations to profitability through operational changes.
However, after nearly two years of efforts, executives determined that some markets were no longer the right fit for the brand.
Lefebvre explained that the company made the decision after evaluating the results of its turnaround attempts. As a result, MTY will close several locations where improvements did not meet expectations.
The CEO described the closures as a necessary step to create a healthier business structure.
MTY Food Group plans wider restaurant cuts
Papa Murphy’s represents only part of a larger restructuring plan at MTY Food Group. The company is also closing 68 underperforming corporate-owned restaurants across its portfolio.
Those locations generated more than $10 million in losses over the past year, with performance continuing to decline in many markets.
Although Papa Murphy’s accounts for a significant number of the closures, Lefebvre said the pizza chain does not represent the majority of the company’s losses or costs linked to the shutdowns.
Instead, MTY expects the broader reduction of struggling locations to improve overall performance.
Pizza competition creates pressure for Papa Murphy’s
Papa Murphy’s has built its reputation around its unique take-and-bake model. Unlike traditional pizza restaurants, customers purchase prepared pizzas and finish baking them at home.
The concept once provided a convenient alternative for families looking for fresh pizza without restaurant wait times. However, the company now faces competition from delivery services, fast-casual pizza chains and changing consumer habits.
Additionally, customers have more options than ever, making it harder for smaller restaurant brands to maintain market share.
MTY’s leadership believes reducing weaker locations will allow Papa Murphy’s to focus resources on stronger markets.
Store closures will happen gradually
The company plans to complete the Papa Murphy’s closures over a six- to nine-month period. MTY officials said they will handle the process carefully instead of making rushed decisions.
Lefebvre said the company wants to protect employees, work with landlords and manage distribution challenges connected to closing multiple stores.
The first group of locations is expected to close soon, followed by additional shutdowns as the company continues its review.
MTY leaves room for future changes
While MTY Food Group is reducing its corporate store portfolio, executives said the company is not conducting a rushed sale of assets.
Lefebvre noted that additional closures or sales could happen if they make strategic sense for the business.
For Papa Murphy’s customers, the changes mean some locations will disappear in the coming months. However, MTY believes the restructuring will create a stronger foundation for the brand’s future.
As competition continues across the pizza industry, companies are increasingly focusing on efficiency, profitability and adapting to changing customer preferences.
Source: Fox Business — Pizza chain to close up to 50 locations as sales slump
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