Why the Public Lost Interest in Its Craving for Pizza Hut
In the past, the popular pizza chain was the favorite for groups and loved ones to enjoy its all-you-can-eat buffet, endless salad selection, and ice cream with toppings.
But not as many diners are choosing the chain these days, and it is reducing a significant portion of its UK locations after being bought out of administration for the second time 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.” But now, in her mid-twenties, she states “it's no longer popular.”
In the view of young customer Martina, certain features Pizza Hut has been famous for since it opened in the UK in the 1970s are now less appealing.
“The manner in which they do their all-you-can-eat and their salad station, it seems as if they are lowering standards and have lower standards... They provide so much food and you're like ‘How?’”
As ingredient expenses have increased significantly, Pizza Hut's unlimited dining format has become increasingly pricey to run. As have its outlets, which are being sliced from a large number to just over 60.
The company, similar to other firms, has also experienced its expenses increase. Earlier this year, labor expenses jumped due to higher minimum pay and an increase in employer national insurance contributions.
Chris, 36, and Joanne, 29 mention they used to go at Pizza Hut for a date “from time to time”, but now they choose a rival chain and think Pizza Hut is “not good value”.
Based on your choices, Pizza Hut and Domino's prices are close, says a food expert.
While Pizza Hut has off-premise options through external services, it is losing out to big rivals which focus exclusively to this market.
“Domino's has taken over the off-premise pizza industry thanks to intensive advertising and frequent offers that make customers feel like they're getting a bargain, when in reality the base costs are quite high,” explains the analyst.
But for the couple it is justified to get their date night sent directly.
“We predominantly have meals at home now rather than we eat out,” says Joanne, echoing latest data that show a drop in people visiting informal dining spots.
In the warmer season, informal dining venues saw a six percent decline in customers compared to the previous year.
Additionally, one more competitor to ordered-in pies: the cook-at-home oven pizza.
Will Hawkley, senior partner at an advisory group, points out that not only have grocery stores been offering high-quality prepared pies for a long time – some are even offering pizza-making appliances.
“Shifts in habits are also playing a factor in the performance of casual eateries,” says the analyst.
The increased interest of low-carb regimens has increased sales at chicken shops, while affecting sales of high-carbohydrate options, he notes.
Since people dine out not as often, they may look for a more high-quality meal, and Pizza Hut's American-diner style with vinyl benches and traditional décor can feel more retro than upmarket.
The “explosion of high-quality pizzerias” over the last several years, for example new entrants, has “completely altered the public's perception of what good pizza is,” notes the industry commentator.
“A crisp, airy, digestible pizza with a select ingredients, not the massively greasy, heavy and overloaded pizzas of the past. This, in my view, is what's led to Pizza Hut's decline,” she comments.
“Why would anyone spend a high price on a small, substandard, disappointing pizza from a large brand when you can get a gorgeous, skillfully prepared classic pizza for less than ten pounds at one of the many traditional pizzerias around the country?
“It's an easy choice.”
An independent operator, who owns Smokey Deez based in a county in England says: “The issue isn’t that stopped liking pizza – they just want higher quality at a fair price.”
He says his mobile setup can offer high-quality pie at affordable costs, and that Pizza Hut had difficulty because it could not keep up with changing preferences.
According to an independent chain in Bristol, the founder says the pizza market is diversifying but Pizza Hut has failed to offer anything innovative.
“Currently available are slice concepts, London pizza, new haven, sourdough, traditional Italian, rectangular – it's a heavenly minefield for a pizza enthusiast to explore.”
He says Pizza Hut “must rebrand” as younger people don't have any fond memories or allegiance to the brand.
In recent years, Pizza Hut's customer base has been fragmented and distributed to its fresher, faster alternatives. To maintain its expensive staffing and restaurants, it would have to increase costs – which experts say is difficult at a time when family finances are tightening.
The managing director of Pizza Hut's international markets said the acquisition aimed “to safeguard our dining experience and protect jobs where possible”.
It was explained its key goal was to continue operating at the remaining 64 restaurants and delivery sites and to assist staff through the restructure.
However with significant funds going into operating its locations, it likely can't afford to invest too much in its delivery service because the market is “complicated and using existing third-party platforms comes at a expense”, experts say.
Still, experts suggest, reducing expenses by withdrawing from competitive urban areas could be a effective strategy to evolve.