Pizza chain Papa John’s has an interesting explanation for the company’s flagging sales, and spoiler: the problem apparently isn’t cardboardy pizza topped with meat-adjacent salt-discs that can only be resurrected via dipping sauce.
According to Nations Restaurant News editor Jonathan Maze, who was on Papa John’s third-quarter earnings conference call this morning, CEO John Schnatter says the NFL (for which Papa John’s is a major advertiser) is to blame for flagging sales. While the chain still grew its sales over the last three months, it fell short of analysts’ expectations.
Specifically, according to Slate, Schnatter seems to lay the blame on NFL players’ protests during the national anthem (those protests, started by former 49ers quarterback Colin Kaepernick, are aimed at highlighting police brutality against black Americans). In year-by-year terms, NFL ratings have decreased by eight percent this season: Whether that’s due to protests or simply more people cutting their cable subscriptions remains to be seen — regardless, it means fewer people watching games, and presumably, fewer people ordering pizza delivered to their couches.
As a result of the chain’s earnings announcement (and possibly Schnatter’s comments), Papa John’s share price fell more than 11 percent since this morning.
Schnatter didn’t make a direct link between “fewer bad pizzas sold” and “kneeling football players,” but did insinuate that NFL management should have prevented the protests from escalating; that they “should have been nipped in the bud” sooner.
Says issue between NFL and players "should have been nipped in the bud" 18 months ago. https://t.co/xM8op4jUmz— Jonathan Maze (@jonathanmaze) November 1, 2017
Papa John's blames weaker than expected same-store sales on "negative consumer sentiment" with company's association with NFL. $PZZA— Jonathan Maze (@jonathanmaze) November 1, 2017
The logic seems to be that by allowing protests to continue, the NFL has brought itself into disrepute: Donald Trump has called for fans to boycott the NFL as protests continue. But as Slate’s Ben Mathis-Lilley notes, the NFL’s ratings are improving slightly — and so are ratings for other sports unaffected by any Trump-endorsed boycott — suggesting no mass-boycott effect that could knock on to the pizza chain.
Meanwhile, as the New York Times pointed out in September, other NFL sponsors like beer giant Anheuser-Busch and Nike have been much more positive towards the league and protests, and (at least publicly) haven’t blamed the league for their own business failings. Plus, the protests are a new scapegoat for Papa John’s, which has been anxious about NFL ratings since well before Trump blew up the protest issue.
Of course, it could be that chains are (in general) flailing at present, or that with other, higher-quality pizza chains rapidly expanding, people are awakening to the mediocrity of Papa John’s pizza — Twitter seems to think so.
Papa John's pizza sucks.— Adam Crowley (@_adamcrowley) November 1, 2017
. . . OR because Papa John’s tastes like going down on a muppet https://t.co/zjymbszvsI— J Christopher A (@j_christopher_a) November 1, 2017
• Papa John’s Blames Falling Sales on NFL Players Kneeling During the National Anthem (Seriously) [Slate]
• How N.F.L. Sponsors Have Reacted to ‘Take a Knee’ Protests [NYT]
• Papa John's blames poor restaurant sales on bad NFL ratings [Fox News]
• Beyond Delivery and DiGiorno: Why Fast-Casual Pizza Is So Hot [E]