How the Public Turned Away from Its Appetite for the Pizza Hut Chain
In the past, the popular pizza chain was the go-to for families and friends to feast on its unlimited dining experience, unlimited salad bar, and self-serve ice-cream.
Yet fewer customers are frequenting the chain currently, and it is reducing half of its UK restaurants after being acquired following financial trouble for the second time this calendar year.
“We used to go Pizza Hut when I was a child,” explains Prudence. “It was like a family thing, you'd go on a Sunday – turn it into an event.” Today, aged 24, she states “it's no longer popular.”
For a diner in her twenties, some of the very things Pizza Hut has been recognized for since it started in the UK in the mid-20th century are now not-so-hot.
“The way they do their buffet and their salad bar, it feels like they are cutting corners and have reduced quality... They're giving away so much food and you're like ‘How is that possible?’”
Because food prices have increased significantly, Pizza Hut's all-you-can-eat model has become increasingly pricey to maintain. The same goes for its outlets, which are being reduced from a large number to just over 60.
The business, like many others, has also experienced its operating costs go up. This spring, staffing costs rose due to rises in minimum wages and an increase in employer social security payments.
A couple in their thirties and twenties explain they would often visit at Pizza Hut for a date “from time to time”, but now they get delivery from Domino's and think Pizza Hut is “not good value”.
Based on your choices, Pizza Hut and Domino's costs are close, explains an industry analyst.
Even though Pizza Hut does offer off-premise options through external services, it is falling behind to major competitors which focus exclusively to this market.
“The rival chain has managed to dominate the delivery market thanks to intensive advertising and frequent offers that make consumers feel like they're getting a bargain, when in reality the base costs are on the higher side,” explains the specialist.
But for Chris and Joanne it is justified to get their date night sent directly.
“We predominantly have meals at home now more than we eat out,” comments one of the diners, reflecting current figures that show a decrease in people going to casual and fast-food restaurants.
During the summer months, quick-service eateries saw a six percent decline in customers compared to last summer.
There is also a further alternative to restaurant and takeaway pizzas: the supermarket pizza.
A hospitality expert, head of leisure and hospitality at an advisory group, notes that not only have retailers been providing good-standard oven-ready pizzas for years – some are even selling countertop ovens.
“Lifestyle changes are also contributing in the performance of quick-service brands,” says Mr. Hawkley.
The increased interest of protein-rich eating plans has boosted sales at chicken shops, while hitting sales of carb-heavy pizza, he adds.
Since people dine out not as often, they may look for a more premium experience, and Pizza Hut's classic look with comfortable booths and red and white checked plastic table cloths can feel more retro than premium.
The rise of artisanal pizza places” over the last decade and a half, including boutique chains, has “fundamentally changed the public's perception of what good pizza is,” says the culinary analyst.
“A light, fresh, easy-to-digest product with a select ingredients, not the massively greasy, heavy and overloaded pizzas of the past. That, I think, is what's resulted in Pizza Hut's decline,” she comments.
“What person would spend nearly eighteen pounds on a small, substandard, disappointing pizza from a chain when you can get a stunning, expertly crafted Margherita for less than ten pounds at one of the many traditional pizzerias around the country?
“It's a no-brainer.”
Dan Puddle, who runs a small business based in a regional area explains: “The issue isn’t that lost interest in pizza – they just want improved value.”
Dan says his mobile setup can offer premium pizza at affordable costs, and that Pizza Hut faced challenges because it could not keep up with changing preferences.
From the perspective of a small pizza brand in a city in southwest England, owner Jack Lander says the pizza market is diversifying but Pizza Hut has neglected to introduce anything innovative.
“There are now by-the-slice options, artisanal styles, New Haven-style, fermented dough, traditional Italian, Detroit – it's a heavenly minefield for a pie fan to explore.”
The owner says Pizza Hut “must rebrand” as younger people don't have any emotional connection or allegiance to the brand.
In recent years, Pizza Hut's share has been fragmented and spread to its fresher, faster competitors. To keep up its expensive staffing and restaurants, it would have to charge more – which commentators say is difficult at a time when personal spending are decreasing.
The leadership of Pizza Hut's global operations said the buyout aimed “to safeguard our guest experience and protect jobs where possible”.
He said its first focus was to maintain service at the surviving locations and off-premise points and to support colleagues through the restructure.
Yet with so much money going into operating its locations, it probably cannot to allocate significant resources in its delivery service because the sector is “complicated and partnering with existing delivery apps comes at a cost”, commentators say.
However, it's noted, reducing expenses by exiting oversaturated towns and city centres could be a smart move to adjust.