Group urges boycott of Papa John’s
It’s just the latest trouble for embattled pizza chain
The leader of an African-American activist group is calling for a boycott of Papa John’s pizza over the company’s handling of founder John Schnatter’s use of the N-word.
The Rev. Gerome Sutton of the African American Think Tank in Louisville, Kentucky, said he doesn’t want to see a Papa John’s delivery truck on the road on Wednesdays and Fridays until he can deliver a list of demands to chief executive Steve Ritchie in person.
Schnatter acknowledged having used the N-word in a conference call earlier this year and apologized, leading to his being forced out as chairman and having his founder’s agreement canceled.
The call for a boycott is only the latest trouble for the nation’s third-largest pizza chain, which is based in Louisville. On Tuesday, Papa John’s missed analysts’ earnings estimates for its second quarter, coming in at 49 cents a share instead of the consensus of 54 cents, and fell short on revenue as well. Also, revenue at stores open at least a year, a key retail industry measure that takes out the impact of new units, fell 10.5 percent.
With the stock closing down 5 percent Wednesday to $38.94, it was trading at half the level it was a year ago.
But Sutton focused on issues at the 120,000-employee company that go far beyond the financial ones.
“They’re not trying to do anything other than fix the problem (internally). But they’re not trying to heal the wounds externally,” Sutton said. “... The wounds are still there. The bleeding is gushing. Something has to be done right away.”
Sutton declined to release the full list of demands but said they include appointing an African-American board member, implementing diversity and inclusion training and creating an ad campaign with public-service announcements and full-page newspaper spreads apologizing for Schnatter’s offensive language.
He expects to hear from Ritchie in the next seven to 10 days, Sutton said. He plans to re-evaluate the boycott after the meeting.
A spokeswoman for Papa John’s did not immediately respond to a request for comment.
Ritchie and other top managers with the company, including Victoria Russell, the current chief of diversity and inclusion, embarked on a “listening tour” to nine cities to meet with franchise owners, corporate general managers, employees and customers. A separate in- ternal cultural audit by a third-party firm is also underway.
Last fall, before Schnatter’s comments, employees launched a diversity and inclusion committee with Ritchie’s blessing.
Six subcommittees of 35 to 40 people already had been focused on minority recruitment, LGBT issues, marketing, statistics and social responsibility. Their goal was to offer recommendations to transform the company and make it more purpose-driven.
When Schnatter’s latest remarks surfaced, they “only accelerated” the push for change, Russell said previously.
Ritchie told analysts on a Tuesdayevening conference call that the company is working hard to stay focused on a rebranding effort.
“We are working to make sure that our future is not defined by the words and actions of one person,” Ritchie said, adding that an external cultural audit should provide more guidance to create a new path.
Despite the challenges, Ritchie said the company has great opportunity to “leapfrog” into a stronger position behind more “purpose-driven” branding.
Sutton said Wednesday that he wasn’t pleased with how the company had dealt with the aftermath of the news and called for the company to take strides to “heal the wounds” caused by the language.
He added that he’d had black children come up to him to ask about Schnatter’s language, asking, “What did he mean by using the N-word?”
“It’s insufferable. That’s not the America I know,” Sutton said.