How the Nation Turned Away from Its Appetite for the Pizza Hut Chain
In the past, Pizza Hut was the favorite for groups and loved ones to enjoy its eat-as-much-as-you-like offering, unlimited salad bar, and ice cream with toppings.
But fewer diners are choosing the restaurant nowadays, and it is closing half of its British outlets after being acquired following financial trouble for the second instance this year.
I remember going Pizza Hut when I was a child,” says Prudence. “It was a tradition, you'd go on a Sunday – turn it into an event.” Today, aged 24, she says “it's fallen out of favor.”
According to 23-year-old Martina, the very elements Pizza Hut has been known and loved for since it launched in the UK in the seventies are now less appealing.
“How they do their all-you-can-eat and their salad bar, it appears that they are lowering standards and have lower standards... They offer so much food and you're like ‘How is that possible?’”
Since ingredient expenses have soared, Pizza Hut's buffet-style service has become increasingly pricey to operate. As have its outlets, which are being sliced from a large number to 64.
The company, in common with competitors, has also seen its costs increase. In April this year, labor expenses rose due to increases in the legal wage floor and an increase in employer social security payments.
Two diners say they would often visit at Pizza Hut for a date “occasionally”, but now they choose another pizza brand and think Pizza Hut is “very overpriced”.
Based on your order, Pizza Hut and Domino's prices are comparable, notes an industry analyst.
While Pizza Hut has pickup and delivery through delivery platforms, it is missing out to larger chains which specialize to this market.
“The rival chain has taken over the delivery market thanks to strong promotions and ongoing discounts that make customers feel like they're getting a bargain, when in reality the standard rates are on the higher side,” notes the analyst.
Yet for Chris and Joanne it is acceptable to get their evening together sent directly.
“We definitely eat at home now instead of we eat out,” says Joanne, echoing latest data that show a drop in people going to casual and fast-food restaurants.
In the warmer season, quick-service eateries saw a 6% drop in customers compared to the previous year.
Moreover, another rival to ordered-in pies: the frozen or fresh pizza.
An industry leader, head of leisure and hospitality at an advisory group, explains that not only have retailers been selling high-quality ready-to-bake pizzas for years – some are even selling countertop ovens.
“Lifestyle changes are also having an impact in the performance of fast-food chains,” states Mr. Hawkley.
The growing trend of low-carb regimens has driven sales at poultry outlets, while affecting sales of carb-heavy pizza, he adds.
Because people go out to eat less frequently, they may look for a more upscale outing, and Pizza Hut's classic look with booth seating and red and white checked plastic table cloths can feel more old-fashioned than upmarket.
The growth of premium pizza outlets” over the last several years, such as popular brands, has “completely altered the consumer view of what good pizza is,” says the industry commentator.
“A thin, flavorful, gentle crust with a carefully curated additions, not the overly oily, dense and piled-high pizzas of the past. This, in my view, is what's led to Pizza Hut's downfall,” she comments.
“What person would spend a high price on a tiny, mediocre, unsatisfying pizza from a chain when you can get a gorgeous, skillfully prepared classic pizza for less than ten pounds at one of the many authentic Italian pizzerias around the country?
“It's an easy choice.”
A mobile pizza vendor, who owns Smokey Deez based in a county in England says: “The issue isn’t that fallen out of love with pizza – they just want better pizza for their money.”
He says his adaptable business can offer premium pizza at reasonable rates, and that Pizza Hut struggled because it could not keep up with changing preferences.
From the perspective of a small pizza brand in Bristol, owner Jack Lander says the pizza market is diversifying but Pizza Hut has failed to offer anything fresh.
“Currently available are individual slices, London pizza, New Haven-style, sourdough, wood-fired, rectangular – it's a heavenly minefield for a pie fan to explore.”
He says Pizza Hut “should transform” as the youth don't have any sense of nostalgia or attachment to the chain.
Gradually, Pizza Hut's share has been divided and spread to its trendier, more nimble competitors. To sustain its high labor and location costs, it would have to raise prices – which commentators say is difficult at a time when personal spending are tightening.
The leadership of Pizza Hut's global operations said the acquisition aimed “to ensure our customer service and save employment where possible”.
The executive stated its first focus was to maintain service at the remaining 64 restaurants and off-premise points and to support colleagues through the change.
Yet with large sums going into running its restaurants, it may be unable to invest too much in its off-premise division because the sector is “complex and partnering with existing external services comes at a price”, experts say.
However, it's noted, lowering overhead by exiting competitive urban areas could be a effective strategy to adapt.