Why the Country Lost Its Appetite for the Pizza Hut Chain
At one time, the popular pizza chain was the favorite for groups and loved ones to feast on its unlimited dining experience, help-yourself greens station, and self-serve ice-cream.
Yet not as many customers are frequenting the brand nowadays, and it is reducing 50% of its UK locations after being bought out of administration for the second occasion this calendar year.
“We used to go Pizza Hut when I was a child,” explains one London shopper. “It was like a family thing, you'd go on a Sunday – turn it into an event.” However, at present, as a young adult, she states “it's not a thing anymore.”
According to a diner in her twenties, the very elements Pizza Hut has been known and loved for since it launched in the UK in the mid-20th century are now not-so-hot.
“The manner in which they do their buffet and their salad bar, it appears that they are cutting corners and have inferior offerings... They offer so much food and you're like ‘How?’”
Because food prices have increased significantly, Pizza Hut's unlimited dining format has become increasingly pricey to run. As have its restaurants, which are being reduced from over 130 to just over 60.
The business, similar to other firms, has also experienced its costs rise. In April this year, staffing costs increased due to higher minimum pay and an increase in employer national insurance contributions.
Two diners say they used to go at Pizza Hut for a date “every now and then”, but now they get delivery from another pizza brand and think Pizza Hut is “not good value”.
Depending on your order, Pizza Hut and Domino's rates are comparable, explains a culinary author.
Although Pizza Hut provides pickup and delivery through delivery platforms, it is losing out to major competitors which solely cater to this market.
“The rival chain has managed to dominate the off-premise pizza industry thanks to strong promotions and frequent offers that make customers feel like they're saving money, when in reality the base costs are quite high,” notes the analyst.
Yet for these customers it is justified to get their evening together delivered to their door.
“We predominantly have meals at home now more than we eat out,” says Joanne, echoing current figures that show a drop in people frequenting informal dining spots.
In the warmer season, quick-service eateries saw a six percent decline in diners compared to last summer.
Moreover, another rival to restaurant and takeaway pizzas: the cook-at-home oven pizza.
Will Hawkley, head of leisure and hospitality at a leading firm, points out that not only have retailers been providing high-quality prepared pies for years – some are even selling pizza-making appliances.
“Lifestyle changes are also playing a factor in the popularity of quick-service brands,” says Mr. Hawkley.
The growing trend of high protein diets has driven sales at chicken shops, while affecting sales of high-carbohydrate options, he adds.
Since people visit restaurants not as often, they may prefer a more upscale outing, and Pizza Hut's retro theme with comfortable booths and traditional décor can feel more old-fashioned than upmarket.
The rise of premium pizza outlets” over the last decade and a half, including boutique chains, has “completely altered the public's perception of what good pizza is,” explains the culinary analyst.
“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 downfall,” she states.
“What person would spend £17.99 on a small, substandard, disappointing pizza from a chain when you can get a gorgeous, skillfully prepared Margherita for a lower price at one of the many real Italian restaurants around the country?
“It's an easy choice.”
A mobile pizza vendor, who runs a pizza van based in a regional area says: “People haven’t stopped liking pizza – they just want improved value.”
He says his flexible operation can offer gourmet pizza at affordable costs, and that Pizza Hut faced challenges because it could not keep up with evolving tastes.
According to a small pizza brand in a UK location, owner Jack Lander says the industry is expanding but Pizza Hut has neglected to introduce anything innovative.
“There are now individual slices, regional varieties, new haven, artisan base, traditional Italian, Detroit – it's a wonderful array for a pizza enthusiast to explore.”
The owner says Pizza Hut “must rebrand” as younger people don't have any sense of nostalgia or attachment to the brand.
Over time, Pizza Hut's customer base has been sliced up and distributed to its fresher, faster competitors. To sustain its costly operations, it would have to increase costs – which experts say is challenging at a time when personal spending are decreasing.
The managing director of Pizza Hut's international markets said the buyout aimed “to protect our dining experience and protect jobs where possible”.
It was explained its first focus was to maintain service at the surviving locations and delivery sites and to help employees through the transition.
However with large sums going into operating its locations, it probably cannot to spend heavily in its off-premise division because the market is “difficult and working with existing third-party platforms comes at a expense”, analysts say.
However, it's noted, cutting its costs by withdrawing from crowded locations could be a good way to evolve.