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Just as Domino’s said that it is seeing more restaurant closures among the smaller players, PZZA said today that it expects increased consolidation within the pizza category, resulting in the closures of 2%-3% of the existing 65,000 pizza restaurants within 12-18 months. Management commented that “this should benefit the stronger national chains and [they] believe that the quality brand position will work to [PZZA’s] favor in picking up business from these closed competitor locations.”

I would agree that reduced capacity will benefit all of the market share leaders, including Domino’s.