How the Public Turned Away from 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, help-yourself greens station, and make-your-own dessert.
But not as many customers are choosing the chain nowadays, and it is shutting down half of its British outlets after being acquired following financial trouble for the second occasion this year.
I remember going Pizza Hut when I was a child,” explains one London shopper. “It was like a family thing, you'd go on a Sunday – make a day of it.” However, at present, as a young adult, she comments “it's not a thing anymore.”
According to young customer Martina, some of the very things Pizza Hut has been famous for since it started in the UK in the mid-20th century are now less appealing.
“The manner in which they do their all-you-can-eat and their salad station, it appears that they are lowering standards and have reduced quality... They're giving away so much food and you're like ‘How is that possible?’”
As food prices have soared, Pizza Hut's unlimited dining format has become very expensive to operate. As have its outlets, which are being cut from over 130 to 64.
The chain, in common with competitors, has also seen its operating costs rise. In April this year, labor expenses jumped due to higher minimum pay and an higher rate of employer social security payments.
Chris, 36, and Joanne, 29 say they frequently dined at Pizza Hut for a date “from time to time”, but now they order in Domino's and think Pizza Hut is “too expensive”.
Depending on your order, Pizza Hut and Domino's rates are similar, says a food expert.
Even though Pizza Hut provides pickup and delivery through third-party apps, it is falling behind to big rivals which specialize to the delivery sector.
“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.
But for Chris and Joanne it is acceptable to get their evening together sent directly.
“We definitely eat at home now more than we eat out,” comments Joanne, reflecting current figures that show a drop in people frequenting casual and fast-food restaurants.
During the summer months, informal dining venues saw a 6% drop in customers compared to the previous year.
Additionally, another rival to ordered-in pies: the frozen or fresh pizza.
Will Hawkley, senior partner at a leading firm, notes that not only have retailers been providing premium oven-ready pizzas for a long time – some are even promoting pizza-making appliances.
“Lifestyle changes are also playing a factor in the popularity of fast-food chains,” states the analyst.
The growing trend of low-carb regimens has increased sales at chicken shops, while reducing sales of high-carbohydrate options, he continues.
As people go out to eat more rarely, they may prefer a more high-quality meal, and Pizza Hut's retro theme with vinyl benches and traditional décor can feel more old-fashioned than premium.
The “explosion of premium pizza outlets” over the last decade and a half, such as popular brands, has “completely altered the consumer view of what good pizza is,” notes the food expert.
“A light, fresh, easy-to-digest product with a select ingredients, not the excessively rich, thick and crowded pizzas of the past. This, in my view, is what's resulted in Pizza Hut's decline,” she says.
“Why would anyone spend a high price on a small, substandard, disappointing pizza from a large brand when you can get a gorgeous, skillfully prepared Margherita for a lower price at one of the many traditional pizzerias around the country?
“It's an easy choice.”
An independent operator, who owns a pizza van based in a regional area says: “It's not that fallen out of love with pizza – they just want better pizza for their money.”
He says his mobile setup can offer premium pizza at reasonable rates, and that Pizza Hut had difficulty because it was unable to evolve with changing preferences.
According to Pizzarova in a city in southwest England, owner Jack Lander says the sector is broadening but Pizza Hut has not provided anything new.
“There are now individual slices, London pizza, New Haven-style, artisan base, Neapolitan, rectangular – it's a delightful challenge for a pie fan to discover.”
The owner says Pizza Hut “must rebrand” as the youth don't have any emotional connection or allegiance to the brand.
In recent years, Pizza Hut's share has been divided and spread to its more modern, agile rivals. To keep up its costly operations, it would have to raise prices – which commentators say is difficult at a time when family finances are shrinking.
A senior executive of Pizza Hut's global operations said the acquisition aimed “to protect our dining experience and protect jobs where possible”.
He said its first focus was to maintain service at the open outlets and takeaway hubs and to assist staff through the restructure.
Yet with so much money going into running its restaurants, it probably cannot to spend heavily in its off-premise division because the market is “difficult and using existing external services comes at a price”, experts say.
But, he adds, reducing expenses by withdrawing from crowded locations could be a smart move to evolve.