How the Public Lost Interest in Its Appetite for Pizza Hut
In the past, the popular pizza chain was the favorite for parents and children to feast on its unlimited dining experience, unlimited salad bar, and self-serve ice-cream.
Yet not as many customers are visiting the brand nowadays, and it is shutting down half of its British outlets after being acquired following financial trouble for the second time this calendar year.
I remember going Pizza Hut when I was a child,” notes one London shopper. “It was a tradition, you'd go on a Sunday – make a day of it.” Today, aged 24, she states “it's no longer popular.”
In the view of 23-year-old Martina, some of the very things Pizza Hut has been known and loved for since it started in the UK in the 1970s are now outdated.
“How they do their buffet and their salad station, it seems as if they are cheapening on their quality and have lower standards... They're giving away so much food and you're like ‘How can they?’”
As grocery costs have increased significantly, Pizza Hut's buffet-style service has become quite costly to run. As have its locations, which are being reduced from over 130 to just over 60.
The chain, in common with competitors, has also experienced its costs rise. This spring, staffing costs increased due to increases in the legal wage floor and an increase in employer national insurance contributions.
Two diners mention they would often visit at Pizza Hut for a date “occasionally”, but now they order in Domino's and think Pizza Hut is “too expensive”.
Based on your order, Pizza Hut and Domino's prices are close, notes a food expert.
Even though Pizza Hut provides pickup and delivery through delivery platforms, it is losing out to big rivals which specialize to the delivery sector.
“The rival chain has taken over the off-premise pizza industry thanks to aggressive marketing and ongoing discounts that make consumers feel like they're getting a bargain, when in reality the base costs are on the higher side,” explains the analyst.
Yet for the couple it is acceptable to get their evening together delivered to their door.
“We predominantly have meals at home now instead of we eat out,” explains the female customer, reflecting current figures that show a drop in people going to casual and fast-food restaurants.
In the warmer season, informal dining venues saw a 6% drop in diners compared to the year before.
Moreover, one more competitor to ordered-in pies: the supermarket pizza.
An industry leader, head of leisure and hospitality at a leading firm, points out that not only have retailers been providing premium ready-to-bake pizzas for years – some are even offering home-pizza ovens.
“Shifts in habits are also playing a factor in the popularity of quick-service brands,” comments Mr. Hawkley.
The rising popularity of low-carb regimens has boosted sales at grilled chicken brands, while affecting sales of high-carbohydrate options, he continues.
As people go out to eat not as often, they may look for a more high-quality meal, and Pizza Hut's American-diner style with vinyl benches and traditional décor can feel more old-fashioned than upmarket.
The “explosion of high-quality pizzerias” over the last several years, for example new entrants, has “dramatically shifted the general opinion of what quality pizza is,” explains the industry commentator.
“A thin, flavorful, gentle crust with a few choice toppings, not the overly oily, dense and piled-high pizzas of the past. This, in my view, is what's resulted in Pizza Hut's downfall,” she states.
“Why would anyone spend a high price on a modest, low-quality, underwhelming pizza from a franchise when you can get a beautiful, masterfully-made traditional pie for a lower price at one of the many traditional pizzerias around the country?
“It's a no-brainer.”
Dan Puddle, who runs a small business based in a county in England says: “The issue isn’t that lost interest in pizza – they just want higher quality at a fair price.”
He says his flexible operation can offer premium pizza at reasonable rates, and that Pizza Hut struggled because it was unable to evolve with changing preferences.
According to a small pizza brand in a UK location, owner Jack Lander says the sector is diversifying but Pizza Hut has neglected to introduce anything innovative.
“Currently available are by-the-slice options, artisanal styles, thin crust, artisan base, Neapolitan, deep-dish – it's a wonderful array for a pie fan to discover.”
Jack says Pizza Hut “should transform” as younger people don't have any sense of nostalgia or loyalty to the company.
In recent years, Pizza Hut's customer base has been divided and spread to its more modern, agile competitors. To keep up its expensive staffing and restaurants, it would have to charge more – which experts say is tough at a time when household budgets are decreasing.
The leadership of Pizza Hut's international markets said the rescue aimed “to ensure our guest experience and protect jobs where possible”.
He said its first focus was to maintain service at the surviving locations and delivery sites and to assist staff through the restructure.
But with so much money going into operating its locations, it probably cannot to invest too much in its takeaway operation because the sector is “complicated and using existing external services comes at a expense”, analysts say.
However, it's noted, cutting its costs by exiting oversaturated towns and city centres could be a effective strategy to evolve.