How the Public Lost Its Craving for Pizza Hut
Once, the popular pizza chain was the go-to for parents and children to indulge in its eat-as-much-as-you-like offering, help-yourself greens station, and make-your-own dessert.
Yet a declining number of customers are visiting the chain these days, and it is closing a significant portion of its British restaurants after being bought out of administration for the second time this calendar year.
I remember going Pizza Hut when I was a child,” explains one London shopper. “It was like a family thing, you'd go on a Sunday – spend the whole day there.” But now, aged 24, she says “it's no longer popular.”
According to 23-year-old Martina, the very elements Pizza Hut has been known and loved for since it opened in the UK in the 1970s are now outdated.
“The manner in which they do their all-you-can-eat and their salad station, it appears that they are cheapening on their quality and have inferior offerings... They're giving away so much food and you're like ‘How is that possible?’”
Because grocery costs have increased significantly, Pizza Hut's buffet-style service has become increasingly pricey to run. The same goes for its outlets, which are being reduced from 132 to just over 60.
The business, in common with competitors, has also experienced its operating costs go up. In April this year, staffing costs jumped due to higher minimum pay and an rise in employer national insurance contributions.
Chris, 36, and Joanne, 29 mention they used to go at Pizza Hut for a date “every now and then”, but now they choose a rival chain and think Pizza Hut is “too expensive”.
According to your choices, Pizza Hut and Domino's rates are comparable, says an industry analyst.
Even though Pizza Hut does offer off-premise options through external services, it is losing out to major competitors which solely cater to off-premise dining.
“Another pizza company has managed to dominate the takeaway pizza sector thanks to aggressive marketing and constantly running deals that make shoppers feel like they're saving money, when in reality the original prices are quite high,” says the analyst.
However for Chris and Joanne it is justified to get their special meal sent directly.
“We absolutely dine at home now more than we eat out,” says the female customer, matching recent statistics that show a decline in people going to quick-service eateries.
During the summer months, casual and fast-food restaurants saw a notable decrease in diners compared to last summer.
Additionally, one more competitor to ordered-in pies: the cook-at-home oven pizza.
A hospitality expert, global lead for leisure at an advisory group, notes that not only have grocery stores been offering premium ready-to-bake pizzas for years – some are even offering countertop ovens.
“Shifts in habits are also contributing in the performance of quick-service brands,” says Mr. Hawkley.
The increased interest of low-carb regimens has driven sales at chicken shops, while reducing sales of high-carbohydrate options, he adds.
Because people dine out less frequently, they may seek out a more high-quality meal, and Pizza Hut's classic look with comfortable booths and nostalgic table settings can feel more retro than luxurious.
The rise of high-quality pizzerias” over the last several years, for example popular brands, has “fundamentally changed the public's perception of what excellent pie is,” says the culinary analyst.
“A thin, flavorful, gentle crust with a few choice toppings, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's resulted in Pizza Hut's decline,” she says.
“Why would anyone spend a high price on a modest, low-quality, underwhelming pizza from a franchise when you can get a stunning, expertly crafted Margherita for under a tenner at one of the many authentic Italian pizzerias around the country?
“It's a no-brainer.”
An independent operator, who operates a small business based in Suffolk comments: “The issue isn’t that lost interest in pizza – they just want better pizza for their money.”
He says his mobile setup can offer gourmet pizza at reasonable rates, and that Pizza Hut struggled because it could not keep up with changing preferences.
According to an independent chain in Bristol, owner Jack Lander says the industry is expanding but Pizza Hut has not provided anything new.
“You now have individual slices, London pizza, thin crust, fermented dough, wood-fired, rectangular – it's a delightful challenge for a pie fan to discover.”
Jack says Pizza Hut “must rebrand” as newer generations don't have any sense of nostalgia or loyalty to the company.
Over time, Pizza Hut's market has been fragmented and distributed to its fresher, faster competitors. To sustain its high labor and location costs, it would have to increase costs – which industry analysts say is challenging at a time when personal spending are shrinking.
The managing director of Pizza Hut's global operations said the rescue aimed “to ensure our customer service and protect jobs where possible”.
The executive stated its first focus was to continue operating at the open outlets and off-premise points and to help employees through the transition.
However with large sums going into operating its locations, it likely can't afford to invest too much in its delivery service because the industry is “difficult and working with existing delivery apps comes at a price”, commentators say.
But, he adds, lowering overhead by leaving crowded locations could be a effective strategy to evolve.