How the Public Lost Interest in Its Taste for Pizza Hut
At one time, the popular pizza chain was the favorite for parents and children to indulge in its eat-as-much-as-you-like offering, help-yourself greens station, and self-serve ice-cream.
But a declining number of customers are choosing the brand currently, and it is closing a significant portion of its British restaurants after being acquired following financial trouble for the second time this year.
“We used to go Pizza Hut when I was a child,” says a young adult. “It was a tradition, you'd go on a Sunday – spend the whole day there.” Today, as a young adult, she comments “it's no longer popular.”
For a diner in her twenties, some of the very things Pizza Hut has been famous for since it started in the UK in the seventies are now outdated.
“How they do their all-you-can-eat and their salad bar, it seems as if they are cutting corners and have inferior offerings... They're giving away so much food and you're like ‘How can they?’”
Because food prices have soared, Pizza Hut's unlimited dining format has become increasingly pricey to maintain. The same goes for its outlets, which are being reduced from over 130 to 64.
The business, similar to other firms, has also experienced its costs increase. Earlier this year, labor expenses jumped due to rises in minimum wages and an rise in employer social security payments.
A couple in their thirties and twenties say they used to go at Pizza Hut for a date “every now and then”, but now they get delivery from Domino's and think Pizza Hut is “not good value”.
Depending on your order, Pizza Hut and Domino's rates are comparable, explains a culinary author.
Even though Pizza Hut has off-premise options through third-party apps, it is missing out to major competitors which focus exclusively to the delivery sector.
“Domino's has managed to dominate the takeaway pizza sector thanks to strong promotions and ongoing discounts that make consumers feel like they're saving money, when in reality the base costs are relatively expensive,” explains the analyst.
But for these customers it is acceptable to get their special meal sent directly.
“We predominantly have meals at home now rather than we eat out,” comments one of the diners, reflecting latest data that show a decline in people frequenting informal dining spots.
Over the summer, casual and fast-food restaurants saw a six percent decline in customers compared to the previous year.
There is also another rival to restaurant and takeaway pizzas: the supermarket pizza.
Will Hawkley, senior partner at a major consultancy, points out that not only have retailers been offering high-quality prepared pies for years – some are even promoting home-pizza ovens.
“Shifts in habits are also playing a factor in the popularity of fast-food chains,” says the expert.
The rising popularity of high protein diets has driven sales at chicken shops, while hitting sales of high-carbohydrate options, he adds.
As people go out to eat less frequently, they may prefer a more premium experience, and Pizza Hut's classic look with vinyl benches and nostalgic table settings can feel more dated than luxurious.
The “explosion of artisanal pizza places” over the last 10 to 15 years, for example new entrants, has “dramatically shifted the general opinion of what excellent pie is,” says the industry commentator.
“A light, fresh, easy-to-digest product with a few choice toppings, not the excessively rich, thick and crowded pizzas of the past. That, arguably, is what's led to Pizza Hut's decline,” she states.
“Who would choose to spend £17.99 on a small, substandard, disappointing pizza from a franchise 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 an easy choice.”
An independent operator, who operates a pizza van based in Suffolk explains: “The issue isn’t that fallen out of love with pizza – they just want improved value.”
Dan says his flexible operation can offer high-quality pie at affordable costs, and that Pizza Hut struggled because it could not keep up with evolving tastes.
At a small pizza brand in Bristol, the proprietor says the pizza market is expanding but Pizza Hut has not provided anything innovative.
“There are now slice concepts, artisanal styles, new haven, fermented dough, Neapolitan, rectangular – it's a wonderful array for a pizza enthusiast to discover.”
He 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 divided and allocated to its trendier, more nimble competitors. To keep up its costly operations, it would have to raise prices – which commentators say is tough at a time when household budgets are tightening.
A senior executive of Pizza Hut's overseas branches said the rescue aimed “to ensure our guest experience and protect jobs where possible”.
He said its first focus was to keep running at the surviving locations and takeaway hubs and to support colleagues through the restructure.
However with significant funds going into running its restaurants, it may be unable to spend heavily in its off-premise division because the sector is “complex and working with existing third-party platforms comes at a expense”, commentators say.
But, he adds, reducing expenses by withdrawing from competitive urban areas could be a good way to adapt.