Why the Nation Lost Its Appetite for the Pizza Hut Chain
Once, the popular pizza chain was the top choice for families and friends to indulge in its unlimited dining experience, unlimited salad bar, and self-serve ice-cream.
Yet not as many patrons are visiting the brand these days, and it is closing a significant portion of its UK restaurants after being rescued from insolvency for the second time this year.
“We used to go Pizza Hut when I was a child,” says Prudence. “It was like a family thing, you'd go on a Sunday – turn it into an event.” However, at present, in her mid-twenties, she comments “it's fallen out of favor.”
For 23-year-old Martina, the very elements Pizza Hut has been recognized for since it started in the UK in the 1970s are now outdated.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 cheapening on their quality and have lower standards... They provide so much food and you're like ‘How?’”
As food prices have soared, Pizza Hut's all-you-can-eat model has become very expensive to run. 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. Earlier this year, employee wages jumped due to higher minimum pay and an increase in employer social security payments.
Two diners explain they used to go at Pizza Hut for a date “occasionally”, but now they choose another pizza brand and think Pizza Hut is “too expensive”.
Based on your selection, Pizza Hut and Domino's prices are close, notes a food expert.
Even though Pizza Hut does offer takeaway and deliveries through external services, it is losing out to larger chains which specialize to this market.
“Another pizza company has managed to dominate the takeaway pizza sector thanks to intensive advertising and ongoing discounts that make customers feel like they're finding a good deal, when in reality the base costs are relatively expensive,” says the expert.
Yet for these customers it is acceptable to get their date night delivered to their door.
“We absolutely dine at home now more than we eat out,” says Joanne, matching current figures that show a decrease in people going to quick-service eateries.
During the summer months, informal dining venues saw a six percent decline in diners compared to the year before.
Additionally, a further alternative to restaurant and takeaway pizzas: the supermarket pizza.
An industry leader, senior partner at a major consultancy, explains that not only have supermarkets been providing high-quality ready-to-bake pizzas for years – some are even selling pizza-making appliances.
“Shifts in habits are also contributing in the success of casual eateries,” says Mr. Hawkley.
The rising popularity of protein-rich eating plans has driven sales at grilled chicken brands, while reducing sales of dough-based meals, he adds.
Since people dine out more rarely, they may seek out a more premium experience, and Pizza Hut's classic look with booth seating and traditional décor can feel more old-fashioned than premium.
The growth of high-quality pizzerias” over the last several years, for example new entrants, has “completely altered the consumer view of what quality pizza is,” notes the industry commentator.
“A thin, flavorful, gentle crust with a few choice toppings, not the overly oily, dense and piled-high pizzas of the past. That, arguably, is what's resulted in Pizza Hut's downfall,” she comments.
“What person would spend a high price on a small, substandard, disappointing pizza from a chain when you can get a gorgeous, skillfully prepared classic pizza for under a tenner at one of the many authentic Italian pizzerias around the country?
“It's a no-brainer.”
Dan Puddle, who operates a small business based in Suffolk explains: “The issue isn’t that stopped liking pizza – they just want higher quality at a fair price.”
Dan says his flexible operation can offer gourmet pizza at affordable costs, and that Pizza Hut faced challenges because it could not keep up with new customer habits.
At a small pizza brand in a UK location, the proprietor says the industry is diversifying but Pizza Hut has neglected to introduce anything innovative.
“You now have individual slices, artisanal styles, new haven, artisan base, Neapolitan, Detroit – it's a heavenly minefield for a pie fan to explore.”
Jack says Pizza Hut “must rebrand” as newer generations don't have any emotional connection or allegiance to the brand.
Gradually, Pizza Hut's market has been fragmented and distributed to its more modern, agile rivals. To keep up its costly operations, it would have to raise prices – which experts say is challenging at a time when family finances are decreasing.
The leadership of Pizza Hut's overseas branches said the buyout aimed “to safeguard our dining experience and protect jobs where possible”.
The executive stated its key goal was to continue operating at the remaining 64 restaurants and delivery sites and to support colleagues 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 market is “complex and using existing delivery apps comes at a cost”, experts say.
Still, experts suggest, cutting its costs by withdrawing from competitive urban areas could be a smart move to evolve.