Pizza Hut Resignation, Donatos Pullout Unsettle Sector

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Des Moines, Iowa--It's been a downbeat week for America's pizza purveyors. First, McDonald's Corp. pulled its Donatos Pizza operation out of Atlanta, where it had 23 units, raising questions about the hamburger giant's interest in the sector. Then Yum Brands Inc. replaced the president of its Pizza Hut chain, the world's biggest player in what is clearly a slow-growth, slug-it-out business.

These events add evidence that the pizza business is grasping for customers, not only with hefty discounts and free beverages, but also with products that have little to do with pizza. Both Pizza Hut and Papa John's now are selling chicken items--wings at Pizza Hut and strips at Papa John's. Pizza parlor closures are up at several chains, including Pizza Hut, Papa John's and Domino's. Some of the shrinkage reflects growing competition from quick-casual restaurants offering novel tastes to supermarkets selling take-and-bake pies. -Dow Jones Business News

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