Papa John’s is a bit more optimistic, thanks in part to Shaq
Papa John’s is pinning much of its recovery on the star power of Shaquille O’Neal, who is starting to pop up in marketing for the brand.
The No. 4 U.S. pizza chain, which a year ago was dealing with the fresh fallout of the use of a racial slur by founder John Schnatter, is still seeing its sales fall. Now, though, it says this year’s decline in sales at longstanding locations shouldn’t be as steep as it had anticipated, in part thanks to the optimism it has about O’Neal’s work as a brand ambassador.
While the retired NBA star isn’t in TV commercials yet, he posted about Papa John’s on social media last week. A quick video shared by O’Neal on Twitter and Instagram took viewers inside a Papa John’s board meeting — O’Neal joined the board earlier this year — and showed an item being taste-tested that he says is called the Papadia. The "secret" video was, of course, quickly commented on by the company's own social media accounts.
The Papadia, which looks a bit like a calzone sliced into pieces and served with dipping sauce, was not mentioned by executives on a quarterly conference call on Tuesday afternoon. And while O’Neal himself didn’t speak, his name came up a lot as executives mentioned marketing featuring O’Neal it plans to debut this fall.
“We are very excited to get him off the bench and into a new national advertising campaign coming up this fall,” CEO Steve Ritchie said while discussing O’Neal’s involvement with the chain.
Papa John’s also discussed some of the details of its plans to invest an additional $40 million in marketing, part of an $80 million spending plan disclosed in June. About half of the $40 million set aside for marketing is set to be spent in the second half of 2019 and the remainder will be spent in 2020.
Papa John’s is seeing some improvement. U.S. same-store sales, fell 5.7 percent in the second quarter after dropping 6.9 percent in the first quarter. Papa John’s now anticipates its same-store sales will fall 1 percent to 4 percent this year, after previously calling for a decline of 1 percent to 5 percent.
Its larger rivals continue to grow. Domino’s U.S. same-store sales rose 3 percent, marking that chain’s 33rd consecutive quarter of U.S. same-store sales growth. But that increase disappointed Wall Street analysts, who expect better from the market leader, which posted a 6.9 percent rise a year earlier. Yum Brands’ Pizza Hut, meanwhile, said its U.S. same-store sales rose 2 percent in the second quarter.
Last year, Papa John’s began to work with Endeavor Global Marketing and Havas Media.