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In a recent interview with CNBC’s Jim Cramer, Todd Penegor, the CEO of Papa John’s, shared insights into how the pizza chain has adapted its strategies to prioritize value and attract customers amidst widespread concerns regarding consumer spending.
“We launched a ‘better get you some’ campaign that showcased a more premium offering precisely when consumers were seeking better value,” stated Penegor. He highlighted the swift adjustments made by the company, noting the positive results in their fourth quarter performance and brand health metrics, indicating that Papa John’s has become the fastest-growing pizza chain in terms of perceived value.
An important aspect of this strategy has been the overhaul of Papa John’s loyalty program. The revised initiative now offers customers $2 off their next purchase after spending $15, replacing the previous model of $10 off for a $75 purchase. Penegor emphasized that this change has significantly enhanced the company’s “value perception” and has encouraged more frequent customer visits.
Despite the inflationary pressures and uncertainties surrounding trade, particularly in light of tariffs imposed during former President Donald Trump’s administration, Penegor mentioned that cheese prices have, in fact, declined. He noted that Papa John’s is adapting more quickly to changes in cost inputs than initially expected.
Penegor also addressed potential challenges posed by the growing use of GLP-1 weight loss medications, which some speculate might diminish cravings for less healthy food options. He argued that consumers using these drugs may simply consume smaller quantities, affirming that Papa John’s can still meet diverse customer needs, whether they are having a few slices or just a couple of bites.
“Pizza remains an exceptional value for the money,” Penegor concluded, reinforcing the brand’s commitment to affordability and quality.
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