How the Country Turned Away from Its Appetite for Pizza Hut
In the past, the popular pizza chain was the top choice for groups and loved ones to indulge in its unlimited dining experience, help-yourself greens station, and make-your-own dessert.
But not as many customers are choosing the chain currently, and it is shutting down 50% of its British outlets after being rescued from insolvency for the second time this calendar year.
“We used to go Pizza Hut when I was a child,” explains Prudence. “It was a tradition, you'd go on a Sunday – turn it into an event.” However, at present, as a young adult, she comments “it's not a thing anymore.”
In the view of 23-year-old Martina, certain features Pizza Hut has been known and loved for since it started in the UK in the mid-20th century are now outdated.
“The way they do their buffet and their salad bar, it appears that they are cutting corners and have inferior offerings... They're giving away so much food and you're like ‘How?’”
As food prices have soared, Pizza Hut's unlimited dining format has become very expensive to run. The same goes for its outlets, which are being reduced from over 130 to 64.
The company, in common with competitors, has also seen its costs go up. Earlier this year, employee wages rose due to increases in the legal wage floor and an increase in employer taxes.
A couple in their thirties and twenties mention they used to go at Pizza Hut for a date “every now and then”, but now they order in Domino's and think Pizza Hut is “not good value”.
Depending on your selection, Pizza Hut and Domino's rates are comparable, explains a food expert.
Although Pizza Hut has off-premise options through third-party apps, it is losing out to major competitors which solely cater to the delivery sector.
“The rival chain has managed to dominate the takeaway pizza sector thanks to intensive advertising and ongoing discounts that make consumers feel like they're saving money, when in reality the base costs are relatively expensive,” explains the analyst.
But for the couple it is justified to get their evening together brought to their home.
“We definitely eat at home now instead of we eat out,” comments the female customer, reflecting latest data that show a drop in people visiting casual and fast-food restaurants.
In the warmer season, casual and fast-food restaurants saw a 6% drop in customers compared to the previous year.
There is also another rival to restaurant and takeaway pizzas: the cook-at-home oven pizza.
A hospitality expert, head of leisure and hospitality at an advisory group, points out that not only have grocery stores been offering good-standard ready-to-bake pizzas for a long time – some are even promoting home-pizza ovens.
“Evolving preferences are also playing a factor in the popularity of fast-food chains,” comments Mr. Hawkley.
The growing trend of low-carb regimens has driven sales at chicken shops, while reducing sales of carb-heavy pizza, he adds.
As people go out to eat less frequently, they may seek out a more upscale outing, and Pizza Hut's classic look with vinyl benches and traditional décor can feel more retro than premium.
The growth of high-quality pizzerias” over the last decade and a half, such as new entrants, has “completely altered the general opinion of what quality pizza is,” notes the industry commentator.
“A thin, flavorful, gentle crust with a few choice toppings, not the massively greasy, heavy and overloaded pizzas of the past. That, I think, is what's caused Pizza Hut's struggles,” she states.
“Why would anyone spend £17.99 on a small, substandard, disappointing pizza from a large brand when you can get a stunning, expertly crafted traditional pie for a lower price at one of the many authentic Italian pizzerias around the country?
“The decision is simple.”
An independent operator, who owns a small business based in a county in England says: “It's not that stopped liking pizza – they just want better pizza for their money.”
Dan says his mobile setup can offer premium pizza at affordable costs, and that Pizza Hut had difficulty because it failed to adapt with new customer habits.
At an independent chain in a city in southwest England, the founder says the pizza market is expanding but Pizza Hut has neglected to introduce anything fresh.
“There are now individual slices, artisanal styles, thin crust, fermented dough, traditional Italian, Detroit – it's a wonderful array for a pie fan to try.”
He says Pizza Hut “needs to reinvent itself” as the youth don't have any emotional connection or allegiance to the brand.
Gradually, Pizza Hut's market has been fragmented and allocated to its fresher, faster alternatives. To maintain its high labor and location costs, it would have to raise prices – which industry analysts say is challenging at a time when household budgets are shrinking.
The managing director of Pizza Hut's overseas branches said the buyout aimed “to ensure our customer service and protect jobs where possible”.
The executive stated its key goal was to keep running at the surviving locations and delivery sites and to help employees through the change.
However with so much money going into operating its locations, it likely can't afford to allocate significant resources in its off-premise division because the industry is “complex and partnering with existing external services comes at a expense”, commentators say.
But, he adds, cutting its costs by leaving crowded locations could be a smart move to adapt.