How the Country Lost Its Appetite for Pizza Hut
Once, Pizza Hut was the go-to for parents and children to enjoy its all-you-can-eat buffet, help-yourself greens station, and ice cream with toppings.
However not as many customers are choosing the restaurant nowadays, and it is reducing 50% of its UK outlets after being bought out of administration for the second time this calendar year.
I remember going Pizza Hut when I was a child,” notes one London shopper. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” However, at present, aged 24, she comments “it's no longer popular.”
For young customer Martina, some of the very things Pizza Hut has been known and loved for since it started in the UK in the mid-20th century are now outdated.
“How they do their buffet and their salad station, it feels like they are cheapening on their quality and have lower standards... They provide so much food and you're like ‘How?’”
Because ingredient expenses have soared, Pizza Hut's all-you-can-eat model has become increasingly pricey to maintain. As have its restaurants, which are being cut from over 130 to 64.
The business, similar to other firms, has also faced its costs go up. This spring, staffing costs rose due to rises in minimum wages and an higher rate of employer national insurance contributions.
Two diners explain they would often visit at Pizza Hut for a date “occasionally”, but now they order in Domino's and think Pizza Hut is “not good value”.
According to your order, Pizza Hut and Domino's prices are comparable, says a food expert.
Although Pizza Hut provides takeaway and deliveries through delivery platforms, it is losing out to larger chains which specialize to this market.
“Another pizza company has taken over the takeaway pizza sector thanks to intensive advertising and constantly running deals that make shoppers feel like they're finding a good deal, when in reality the original prices are relatively expensive,” says the analyst.
But for the couple it is acceptable to get their special meal delivered to their door.
“We absolutely dine at home now instead of we eat out,” explains Joanne, matching recent statistics that show a drop in people visiting casual and fast-food restaurants.
Over the summer, quick-service eateries saw a six percent decline in customers compared to the previous year.
Moreover, a further alternative to ordered-in pies: the cook-at-home oven pizza.
Will Hawkley, global lead for leisure at a major consultancy, notes that not only have retailers been selling high-quality oven-ready pizzas for a long time – some are even selling countertop ovens.
“Evolving preferences are also having an impact in the popularity of quick-service brands,” comments the analyst.
The growing trend of high protein diets has boosted sales at poultry outlets, while affecting sales of high-carbohydrate options, he notes.
Since people go out to eat not as often, they may seek out a more premium experience, and Pizza Hut's American-diner style with booth seating and red and white checked plastic table cloths can feel more dated than upmarket.
The rise of high-quality pizzerias” over the last several years, for example boutique chains, has “fundamentally changed the consumer view of what excellent pie is,” says the food expert.
“A crisp, airy, digestible pizza with a few choice toppings, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's caused Pizza Hut's downfall,” she says.
“What person would spend £17.99 on a small, substandard, disappointing pizza from a large brand when you can get a beautiful, masterfully-made traditional pie for a lower price at one of the many authentic Italian pizzerias around the country?
“It's a no-brainer.”
Dan Puddle, who owns a pizza van based in a county in England explains: “It's not that stopped liking pizza – they just want higher quality at a fair price.”
Dan says his adaptable business can offer premium pizza at affordable costs, and that Pizza Hut struggled because it was unable to evolve with changing preferences.
At Pizzarova in a city in southwest England, the founder says the industry is diversifying but Pizza Hut has not provided anything fresh.
“Currently available are by-the-slice options, regional varieties, New Haven-style, sourdough, wood-fired, deep-dish – it's a delightful challenge for a pie fan to explore.”
The owner says Pizza Hut “should transform” as younger people don't have any emotional connection or loyalty to the chain.
Over time, Pizza Hut's customer base has been divided and distributed to its more modern, agile competitors. To keep up its costly operations, it would have to raise prices – which industry analysts say is tough at a time when personal spending are shrinking.
A senior executive of Pizza Hut's international markets said the acquisition aimed “to safeguard our guest experience and protect jobs where possible”.
The executive stated its first focus was to continue operating at the remaining 64 restaurants and takeaway hubs and to support colleagues through the change.
But with large sums going into operating its locations, it probably cannot to spend heavily in its delivery service because the sector is “complicated and working with existing external services comes at a expense”, analysts say.
But, he adds, cutting its costs by leaving crowded locations could be a effective strategy to evolve.