Papa John's UK Closes 74 of Its Outlets in Profitability Drive
Posted by Emma on 7th Aug 2025 Reading Time:
Papa John's, the renowned American pizza chain, has announced the closure of 74 restaurants across the UK in an attempt to stem increasing financial losses and refocus its business strategy on profitability. The closures, representing roughly one-seventh of its UK presence, come as the company faces challenging economic conditions marked by declining turnover and escalating operational costs.
Financial results for the year ending 29 December 2024 highlight the scale of the issues confronting the company. Papa John's GB reported pre-tax losses of £21.8 million, an increase from £19.3 million the previous year. The chain also saw turnover drop significantly from £95.9 million to £88.7 million within the same period, underlining the severity of its financial difficulties.
In response to these mounting pressures, Papa John's has significantly reduced staffing costs, from £8.1 million in 2023 to £7.4 million in 2024, with the average monthly number of employees declining from 176 to 167. Despite these cuts, the directors acknowledged ongoing struggles due to rising labour, insurance, fuel, and commodity expenses, coupled with competitive pressures from third-party delivery services.
Chris Phylactou, Managing Director of Papa John's UK, emphasised that closures were a necessary step, though difficult. "Having people lose their jobs is the last option for us," he noted. "We maintained the restaurants probably longer than we should have to safeguard the workforce for as long as possible."
Looking ahead, the directors stated that Papa John's would continue to invest strategically in capabilities, technology, and research to strengthen its franchise operations. There is also a stated intention to diversify the types of outlets beyond traditional locations, including expansions into holiday parks. The company remains hopeful that these tough decisions will lay the groundwork for a return to profitability by 2025.
Papa John's, founded by John Schnatter in Jeffersonville, Indiana, first entered the UK market in 1999. Despite the latest round of closures, it still operates 457 UK locations, 444 of which are franchisee-operated.
While the future may appear challenging, the company's management is cautiously optimistic. As Phylactou explained, "It's never an easy decision and something that I wasn't happy doing, but it's something that we had to do as a brand." These strategic adjustments underscore the severity of the economic headwinds facing many restaurant businesses in the UK today.