How the Public Lost Interest in Its Appetite for the Pizza Hut Chain
In the past, the popular pizza chain was the go-to for groups and loved ones to feast on its all-you-can-eat buffet, endless salad selection, and make-your-own dessert.
However a declining number of diners are choosing the restaurant nowadays, and it is shutting down half of its British locations after being rescued from insolvency for the second time this calendar year.
It was common to visit Pizza Hut when I was a child,” says Prudence. “It was a tradition, you'd go on a Sunday – make a day of it.” Today, in her mid-twenties, she says “it's fallen out of favor.”
In the view of 23-year-old Martina, some of the very things Pizza Hut has been recognized for since it started in the UK in the mid-20th century are now not-so-hot.
“The manner in which they do their all-you-can-eat and their salad bar, it feels like they are lowering standards and have inferior offerings... They provide so much food and you're like ‘How can they?’”
As grocery costs have soared, Pizza Hut's buffet-style service has become quite costly to operate. As have its restaurants, which are being cut from 132 to 64.
The company, in common with competitors, has also experienced its expenses rise. In April this year, staffing costs jumped due to increases in the legal wage floor and an increase in employer national insurance contributions.
Two diners mention they frequently dined at Pizza Hut for a date “from time to time”, but now they get delivery from another pizza brand and think Pizza Hut is “not good value”.
According to your selection, Pizza Hut and Domino's costs are similar, notes a culinary author.
Although Pizza Hut provides pickup and delivery through third-party apps, it is falling behind to larger chains which solely cater to off-premise dining.
“The rival chain has taken over the off-premise pizza industry thanks to strong promotions and constantly running deals that make shoppers feel like they're saving money, when in reality the standard rates are quite high,” explains the analyst.
Yet for the couple it is acceptable to get their date night sent directly.
“We predominantly have meals at home now more than we eat out,” says the female customer, reflecting current figures that show a decrease in people visiting informal dining spots.
Over the summer, quick-service eateries saw a six percent decline in patrons compared to last summer.
Additionally, one more competitor to ordered-in pies: the cook-at-home oven pizza.
A hospitality expert, head of leisure and hospitality at a major consultancy, notes that not only have grocery stores been selling premium ready-to-bake pizzas for years – some are even selling home-pizza ovens.
“Lifestyle changes are also contributing in the performance of fast-food chains,” states the expert.
The rising popularity of low-carb regimens has boosted sales at chicken shops, while hitting sales of carb-heavy pizza, he adds.
Since people go out to eat more rarely, they may look for a more high-quality meal, and Pizza Hut's classic look with vinyl benches and red and white checked plastic table cloths can feel more dated than upmarket.
The growth of high-quality pizzerias” over the last several years, such as new entrants, has “dramatically shifted the public's perception of what quality pizza is,” says the food expert.
“A crisp, airy, digestible pizza with a carefully curated additions, not the overly oily, dense and piled-high pizzas of the past. That, arguably, is what's led to Pizza Hut's struggles,” she states.
“Why would anyone spend nearly eighteen pounds on a tiny, mediocre, unsatisfying pizza from a large brand when you can get a gorgeous, skillfully prepared classic pizza for less than ten pounds at one of the many traditional pizzerias around the country?
“The decision is simple.”
An independent operator, who runs a pizza van based in a county in England explains: “The issue isn’t that stopped liking pizza – they just want improved value.”
Dan says his mobile setup can offer premium pizza at reasonable rates, and that Pizza Hut had difficulty because it could not keep up with new customer habits.
From the perspective of Pizzarova in a UK location, owner Jack Lander says the pizza market is diversifying but Pizza Hut has failed to offer anything new.
“You now have slice concepts, regional varieties, new haven, artisan base, wood-fired, deep-dish – it's a heavenly minefield for a pizza enthusiast to explore.”
The owner says Pizza Hut “should transform” as the youth don't have any fond memories or allegiance to the company.
In recent years, Pizza Hut's market has been fragmented and spread to its fresher, faster rivals. To sustain its expensive staffing and restaurants, it would have to increase costs – which experts say is tough at a time when personal spending are tightening.
A senior executive of Pizza Hut's global operations said the rescue aimed “to safeguard our dining experience and retain staff where possible”.
It was explained its immediate priority was to continue operating at the open outlets and delivery sites and to assist staff through the transition.
Yet with significant funds going into operating its locations, it likely can't afford to spend heavily in its off-premise division because the industry is “difficult and partnering with existing external services comes at a cost”, analysts say.
Still, experts suggest, cutting its costs by leaving oversaturated towns and city centres could be a effective strategy to evolve.