Dive Brief:

• Papa John's announced the opening of its 2,000th restaurant outside of North America. The milestone unit opened in Moscow and added to the company’s Russian footprint, which now includes more than 200 restaurants, and is one of its fastest growing markets, according to a press release. 
• The 2,000th store was opened by PJ Western, a master franchisee in Russia, the Commonwealth of Independent States and Poland. 
• In the release, CEO Steve Ritchie said the company will continue to seek additional opportunities to expand around the world.

Dive Insight:

It doesn't appear that Papa John’s is going to rest on its international laurels anytime soon. Papa John's first opened internationally in Mexico City in 1998. It marked its 500th international opening in Turkey in 2008, and its 1,000th international opening in 2013. In the company’s press release, Papa John's COO Jack Swaysland said international development is the long-term growth engine for the company.

Indeed, global expansion has been a bit brighter for the company compared to its domestic business as it continues to navigate a messy fallout with founder John Schnatter. International comps in Q4 were down 1.6% for the year, while North American comps were down 7.3%, for example, according to its 2018 earnings release.  

As Ritchie noted during the Q4 earnings call, international unit counts are growing at a double-digit pace and the company opened a record 304 international restaurants on the year. Papa John's has entered 12 new countries since 2016, which extends its global footprint to 47 countries and territories. 

Pizza continues to be a very popular American staple, but the domestic market has become saturated. The number of pizzerias in 2018 in the U.S. were down by 300 stores to 75,000 units compared to 2017, according to CHD Expert. Competitive pressures have also kicked into high gear as more concepts level the playing field with delivery, once a major advantage in the pizza space.

This, coupled with a long runway internationally has turned some chains' focus overseas. As PMQ reports, large pizza chains have been eyeing international markets that have increasing disposable incomes. High-growth markets include Eastern Europe pizza (up 11% in the five-year forecast), the Middle East/Africa (15%), Latin America (18%) Asia/Pacific (22%) and China (28%).

Comparatively, Russia is up just 2%. Still, Papa John's has a relatively long history in Russia and an experienced operator in master franchisee PJ Western. In 2004, Russia became the seventh market Papa John's entered. Potential remains thanks in large part to the novelty. American chains, including pizzerias, didn't start cropping up until the 1990s. 

However, even if Papa John's finds solid footing internationally — especially compared to its recent domestic market share erosion — it won't be an easy win. The competition is just as relentless overseas. In February, for example, Domino's marked its 100th straight quarter of international same-store sales growth and opened 435 new global units in 2018. There are no signs of the company slowing either. Domino's expects to open over 6,500 locations by the end of 2025 across its largest global markets. Meanwhile, Pizza Hut partnered with Telepizza last year to grow its global footprint in Latin America, the Caribbean, Spain, Portugal and Switzerland.