Why the Country Lost Interest in Its Appetite for the Pizza Hut Chain
Once, the popular pizza chain was the top choice for parents and children to feast on its eat-as-much-as-you-like offering, endless salad selection, and self-serve ice-cream.
However not as many diners are choosing the restaurant nowadays, and it is shutting down 50% of its UK locations after being rescued from insolvency for the second occasion this year.
I remember going Pizza Hut when I was a child,” says Prudence. “It was like a family thing, you'd go on a Sunday – make a day of it.” But now, aged 24, she says “it's fallen out of favor.”
In the view of 23-year-old Martina, the very elements Pizza Hut has been known and loved for since it launched in the UK in the seventies are now not-so-hot.
“The way they do their buffet and their salad bar, it appears that they are cheapening on their quality and have lower standards... They're giving away so much food and you're like ‘How?’”
Because ingredient expenses have increased significantly, Pizza Hut's all-you-can-eat model has become very expensive to operate. The same goes for its locations, which are being sliced from over 130 to 64.
The company, similar to other firms, has also experienced its expenses go up. In April this year, employee wages rose due to increases in the legal wage floor and an rise in employer national insurance contributions.
Two diners say they frequently dined at Pizza Hut for a date “every now and then”, but now they choose Domino's and think Pizza Hut is “very overpriced”.
According to your choices, Pizza Hut and Domino's rates are comparable, explains a food expert.
While Pizza Hut provides off-premise options through external services, it is losing out to major competitors which focus exclusively to off-premise dining.
“Another pizza company has succeeded in leading the delivery market thanks to aggressive marketing and frequent offers that make consumers feel like they're finding a good deal, when in reality the base costs are quite high,” notes the analyst.
However for the couple it is justified to get their date night sent directly.
“We definitely eat at home now rather than we eat out,” comments one of the diners, matching recent statistics that show a decrease in people going to casual and fast-food restaurants.
During the summer months, quick-service eateries saw a notable decrease in diners compared to the year before.
There is also one more competitor to restaurant and takeaway pizzas: the frozen or fresh pizza.
An industry leader, global lead for leisure at a major consultancy, notes that not only have supermarkets been providing high-quality oven-ready pizzas for years – some are even offering pizza-making appliances.
“Evolving preferences are also playing a factor in the popularity of fast-food chains,” states Mr. Hawkley.
The growing trend of low-carb regimens has driven sales at grilled chicken brands, while hitting sales of dough-based meals, he continues.
Since people go out to eat more rarely, they may look for a more high-quality meal, and Pizza Hut's American-diner style with comfortable booths and traditional décor can feel more old-fashioned than premium.
The rise of premium pizza outlets” over the last 10 to 15 years, for example popular brands, has “dramatically shifted 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 overly oily, dense and piled-high pizzas of the past. That, I think, is what's resulted in Pizza Hut's decline,” she comments.
“What person would spend a high price on a modest, low-quality, underwhelming pizza from a chain when you can get a stunning, expertly crafted Margherita for less than ten pounds at one of the many real Italian restaurants around the country?
“The decision is simple.”
An independent operator, who runs Smokey Deez based in a regional area says: “The issue isn’t that lost interest in pizza – they just want better pizza for their money.”
Dan says his adaptable business can offer premium pizza at reasonable rates, and that Pizza Hut had difficulty because it was unable to evolve with new customer habits.
From the perspective of a small pizza brand in a UK location, owner Jack Lander says the industry is expanding but Pizza Hut has neglected to introduce anything innovative.
“You now have individual slices, artisanal styles, New Haven-style, fermented dough, Neapolitan, deep-dish – it's a delightful challenge for a pie fan to try.”
The owner says Pizza Hut “must rebrand” as newer generations don't have any fond memories or attachment to the brand.
In recent years, Pizza Hut's customer base has been sliced up and spread to its more modern, agile competitors. To keep up its costly operations, it would have to increase costs – which experts say is tough at a time when personal spending are decreasing.
The leadership of Pizza Hut's global operations said the rescue aimed “to safeguard our customer service and save employment where possible”.
He said its first focus was to continue operating at the open outlets and delivery sites and to support colleagues through the transition.
Yet with so much money going into operating its locations, it probably cannot to spend heavily in its delivery service because the sector is “complex and partnering with existing third-party platforms comes at a cost”, commentators say.
However, it's noted, reducing expenses by leaving crowded locations could be a smart move to evolve.