Why the Country Lost Its Appetite for Pizza Hut
In the past, the popular pizza chain was the favorite for parents and children to indulge in its unlimited dining experience, endless salad selection, and ice cream with toppings.
But fewer diners are visiting the restaurant currently, and it is closing a significant portion of its UK outlets after being bought out of administration for the second time this year.
“We used to go Pizza Hut when I was a child,” says a young adult. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” But now, in her mid-twenties, she says “it's fallen out of favor.”
For young customer Martina, the very elements Pizza Hut has been known and loved for since it launched in the UK in the 1970s are now less appealing.
“How they do their all-you-can-eat and their salad station, it seems as if they are lowering standards and have lower standards... They offer so much food and you're like ‘How is that possible?’”
Since grocery costs have increased significantly, Pizza Hut's unlimited dining format has become increasingly pricey to maintain. Similarly, its locations, which are being cut from 132 to just over 60.
The business, in common with competitors, has also faced its expenses increase. This spring, employee wages rose due to increases in the legal wage floor and an increase in employer national insurance contributions.
Chris, 36, and Joanne, 29 explain they would often visit at Pizza Hut for a date “from time to time”, 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 prices are comparable, notes a culinary author.
Although Pizza Hut provides takeaway and deliveries through delivery platforms, it is losing out to larger chains which focus exclusively to the delivery sector.
“The rival chain has managed to dominate the takeaway pizza sector thanks to strong promotions and ongoing discounts that make customers feel like they're saving money, when in reality the standard rates are relatively expensive,” says the analyst.
However for these customers it is worth it to get their date night sent directly.
“We definitely eat at home now rather than we eat out,” says the female customer, reflecting latest data that show a decrease in people frequenting informal dining spots.
During the summer months, casual and fast-food restaurants saw a notable decrease in patrons compared to last summer.
Moreover, another rival to ordered-in pies: the cook-at-home oven pizza.
An industry leader, senior partner at a leading firm, explains that not only have retailers been selling premium prepared pies for years – some are even selling countertop ovens.
“Shifts in habits are also having an impact in the performance of casual eateries,” comments the analyst.
The increased interest of high protein diets has boosted sales at chicken shops, while affecting sales of high-carbohydrate options, he adds.
Because people go out to eat more rarely, they may look for a more high-quality meal, and Pizza Hut's retro theme with vinyl benches and red and white checked plastic table cloths can feel more dated than luxurious.
The rise of artisanal pizza places” over the last 10 to 15 years, including boutique chains, has “fundamentally changed the consumer view of what quality pizza is,” notes the food expert.
“A light, fresh, easy-to-digest product with a few choice toppings, not the excessively rich, thick and crowded pizzas of the past. This, in my view, is what's caused Pizza Hut's struggles,” she says.
“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 a lower price at one of the many real Italian restaurants around the country?
“It's a no-brainer.”
Dan Puddle, who operates a pizza van based in a regional area explains: “People haven’t stopped liking pizza – they just want higher quality at a fair price.”
Dan says his adaptable business can offer high-quality pie at affordable costs, and that Pizza Hut struggled because it failed to adapt with changing preferences.
From the perspective of Pizzarova in a UK location, the founder says the sector is diversifying but Pizza Hut has neglected to introduce anything fresh.
“You now have by-the-slice options, regional varieties, thin crust, artisan base, Neapolitan, rectangular – it's a heavenly minefield for a pizza-loving consumer to discover.”
Jack says Pizza Hut “must rebrand” as newer generations don't have any emotional connection or attachment to the chain.
In recent years, Pizza Hut's customer base has been sliced up and spread to its trendier, more nimble alternatives. To maintain its expensive staffing and restaurants, it would have to charge more – which industry analysts say is challenging at a time when family finances are decreasing.
A senior executive of Pizza Hut's global operations said the buyout aimed “to ensure our dining experience and protect jobs where possible”.
The executive stated its first focus was to maintain service at the open outlets and off-premise points and to assist staff through the restructure.
However with large sums going into running its restaurants, it likely can't afford to spend heavily in its takeaway operation because the industry is “difficult and partnering with existing delivery apps comes at a cost”, experts say.
But, he adds, reducing expenses by leaving competitive urban areas could be a good way to adapt.