It is no secret that fast food has become less affordable for consumers over the past few years as prices have skyrocketed in the quick-service restaurant industry.
A report from the Roosevelt Institute last year found that fast-food prices have increased by almost 47% over the past decade. The average price of a typical fast-food meal in large U.S. cities is now $11.56, according to a recent report from LendingTree.
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As fast-food chains raise prices, many consumers across the country are avoiding fast food like the flu. According to KPMG’s Consumer Pulse Summer 2025 report, 69% of U.S. consumers in the survey said that they eat at home more often rather than eating out, and 85% said that saving money was the main reason for this decision.
Related: Papa Johns makes major menu change to win back customers
Papa Johns (PZZA) is one of the many restaurant chains that have seen weak consumer demand over the past few financial quarters amid this growing trend.
Papa Johns’ second-quarter earnings report for 2025 revealed that its comparable sales in the U.S. only increased by 1% year-over-year, while company-owned restaurants in the region were flat, a slight improvement from the declining sales it faced last quarter.
However, the company’s net income declined by roughly 22% year-over-year.
Papa Johns execs flag that customers are switching gears
During an earnings call on Aug. 7, Papa Johns revealed that while the number of pizzas ordered during the second quarter increased by 6%, the amount of money customers spent per order slightly decreased.
Papa Johns Chief Financial Officer Ravi Thanawala said during the call that the company also noticed a decrease in sales over the last few weeks after a strong second-quarter performance.
“Through the first five weeks of the third quarter, North America comparable sales are down approximately 1% as we’ve seen a more cautious consumer and softer carryout business,” said Thanawala.
Related: Pizza Hut’s wild new menu offer for customers keeps selling out
The decrease in sales comes after Papa Johns recently made bold menu changes to win back customers. In June, it announced that its Shaq-a-Roni pizza, which was launched in 2020 for a limited time, will become a permanent menu item, selling for $15.99 nationwide.
The pizza chain also recently added a Cheddar Crust pizza to its menu, which starts at $11.99, and Cheddar Cheesesticks for $10.50. Papa Johns also recently launched its first-ever Croissant Pizza.
During the call, Papa Johns CEO Todd Penegor emphasized that the company is battling heightened competition.
“You know, it is intense,” said Penegor. “There is a lot of competitive activity out there. You know, you gotta win the hearts and minds from consumer, both from a value and a quality perspective.”
Papa Johns hopes new strategy will attract back customers
To boost sales, Papa Johns is relying on several major changes to attract customers.
In June, it launched a marketing campaign that emphasized the “six simple ingredients” of its “fresh, never frozen original dough.”
“Our customers have told us that using simple, fresh ingredients is our biggest and most important differentiator, and we’ve doubled down on that message in our national marketing campaign,” said Penegor. “Consumers want high-quality pizza with real ingredients, and our messaging strategy meets them where they are, emphasizing our points of differentiation and showcasing select core products at relevant price points.”
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He also said the company is further investing in artificial intelligence to “enhance the ordering experience, better anticipate our customers’ needs, generate proactive recommendations, and share relevant offers and messaging based on learned customer preferences.”
Papa Johns also hopes that its revamped loyalty program will continue to attract customers with exclusive deals. The pizza chain is also planning to launch new menu items soon.
“Coming up, we’ve got an on-trend shareable pizza format with a new lineup of dipping sauces,” said Penegor. “And we got in test what we’re calling the Grand Papa, which is our biggest pizza ever, and we’re excited about that one too.”
Throughout the rest of 2025, consumers should expect to see new Papa Johns stores across the country as the company plans to open 85 to 115 new stores in the U.S. However, it is also anticipating U.S. store closures to be at the higher end of its historical average of approximately 1.5 to 2%, impacting small-town restaurants.
Amid these changes and recent customer behavior, Papa Johns expects comparable U.S. sales to either be flat or up 2% by the end of the year.
Related: McDonald’s faces another major boycott from customers
