How the Public Lost Its Appetite for Pizza Hut
At one time, the popular pizza chain was the favorite for groups and loved ones to indulge in its eat-as-much-as-you-like offering, endless salad selection, and make-your-own dessert.
But a declining number of customers are frequenting the chain these days, and it is closing 50% of its UK locations after being bought out of administration for the second instance this year.
It was common to visit Pizza Hut when I was a child,” notes one London shopper. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” Today, aged 24, 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Martina, some of the very things Pizza Hut has been known and loved for since it opened in the UK in the 1970s are now outdated.
“The manner in which they do their buffet and their salad bar, it appears that they are cutting corners and have reduced quality... They provide so much food and you're like ‘How?’”
Because grocery costs have soared, Pizza Hut's unlimited dining format has become quite costly to operate. As have its outlets, which are being cut from a large number to a smaller figure.
The chain, like many others, has also faced its operating costs increase. Earlier this year, labor expenses jumped due to rises in minimum wages and an rise in employer taxes.
A couple in their thirties and twenties explain they frequently dined at Pizza Hut for a date “occasionally”, but now they get delivery from a rival chain and think Pizza Hut is “very overpriced”.
Based on your order, Pizza Hut and Domino's rates are similar, notes a culinary author.
Even though Pizza Hut has pickup and delivery through third-party apps, it is falling behind to larger chains which solely cater to the delivery sector.
“The rival chain has succeeded in leading the takeaway pizza sector thanks to intensive advertising and frequent offers that make customers feel like they're getting a bargain, when in reality the original prices are quite high,” says the specialist.
However for the couple it is acceptable to get their special meal delivered to their door.
“We definitely eat at home now rather than we eat out,” comments Joanne, reflecting latest data that show a decrease in people frequenting casual and fast-food restaurants.
Over the summer, quick-service eateries saw a six percent decline in customers compared to last summer.
Moreover, another rival to restaurant and takeaway pizzas: the cook-at-home oven pizza.
A hospitality expert, global lead for leisure at a major consultancy, explains that not only have retailers been providing good-standard oven-ready pizzas for a long time – some are even promoting home-pizza ovens.
“Shifts in habits are also contributing in the popularity of casual eateries,” says the expert.
The growing trend of high protein diets has driven sales at poultry outlets, while reducing sales of dough-based meals, he adds.
As people dine out not as often, they may look for a more upscale outing, and Pizza Hut's American-diner style with comfortable booths and red and white checked plastic table cloths can feel more retro than luxurious.
The growth of premium pizza outlets” over the last several years, including boutique chains, has “fundamentally changed the consumer view of what excellent pie is,” explains the industry commentator.
“A crisp, airy, digestible pizza with a carefully curated additions, not the excessively rich, thick and crowded pizzas of the past. This, in my view, is what's resulted in Pizza Hut's struggles,” she says.
“Why would anyone spend nearly eighteen pounds on a modest, low-quality, underwhelming pizza from a large brand when you can get a beautiful, masterfully-made traditional pie for under a tenner at one of the many real Italian restaurants around the country?
“It's a no-brainer.”
An independent operator, who runs a small business based in a regional area explains: “The issue isn’t that fallen out of love with pizza – they just want higher quality at a fair price.”
He says his adaptable business can offer gourmet pizza at reasonable rates, and that Pizza Hut faced challenges because it was unable to evolve with evolving tastes.
At Pizzarova in a UK location, owner Jack Lander says the industry is diversifying but Pizza Hut has neglected to introduce anything innovative.
“You now have individual slices, regional varieties, new haven, fermented dough, traditional Italian, rectangular – it's a heavenly minefield for a pizza-loving consumer to try.”
Jack says Pizza Hut “must rebrand” as younger people don't have any fond memories or loyalty to the chain.
Over time, Pizza Hut's customer base has been divided and spread to its trendier, more nimble rivals. To keep up its high labor and location costs, it would have to charge more – which experts say is tough at a time when personal spending are decreasing.
The managing director of Pizza Hut's overseas branches said the rescue aimed “to protect our customer service and save employment where possible”.
It was explained its key goal was to keep running at the open outlets and off-premise points and to assist staff through the restructure.
But with large sums going into maintaining its outlets, it may be unable to invest too much in its takeaway operation because the market is “complicated and working with existing delivery apps comes at a cost”, commentators say.
Still, experts suggest, lowering overhead by withdrawing from competitive urban areas could be a smart move to adapt.