How the Country Lost Its Appetite for Pizza Hut

Once, the popular pizza chain was the top choice for families and friends to indulge in its eat-as-much-as-you-like offering, endless salad selection, and ice cream with toppings.

However a declining number of customers are visiting the chain currently, and it is shutting down 50% of its British restaurants after being rescued from insolvency for the second occasion this calendar year.

I remember going Pizza Hut when I was a child,” says one London shopper. “It was a regular outing, you'd go on a Sunday – turn it into an event.” However, at present, in her mid-twenties, she states “it's fallen out of favor.”

In the view of young customer Martina, certain features Pizza Hut has been known and loved for since it launched in the UK in the 1970s are now not-so-hot.

“The way they do their all-you-can-eat and their salad station, it seems as if they are cheapening on their quality and have reduced quality... They provide so much food and you're like ‘How?’”

As food prices have increased significantly, Pizza Hut's unlimited dining format has become quite costly to run. As have its restaurants, which are being reduced from 132 to 64.

The company, in common with competitors, has also experienced its expenses rise. Earlier this year, labor expenses increased due to increases in the legal wage floor and an rise in employer taxes.

A couple in their thirties and twenties say they would often visit at Pizza Hut for a date “from time to time”, but now they get delivery from a rival chain and think Pizza Hut is “not good value”.

According to your selection, Pizza Hut and Domino's rates are close, notes an industry analyst.

Although Pizza Hut does offer off-premise options through third-party apps, it is missing out to larger chains which focus exclusively to this market.

“Another pizza company has succeeded in leading the takeaway pizza sector thanks to strong promotions and constantly running deals that make customers feel like they're getting a bargain, when in reality the base costs are quite high,” explains the expert.

But for these customers it is acceptable to get their date night sent directly.

“We predominantly have meals at home now instead of we eat out,” comments one of the diners, reflecting recent statistics that show a drop in people visiting quick-service eateries.

Over the summer, informal dining venues saw a six percent decline in patrons compared to the year before.

There is also one more competitor to restaurant and takeaway pizzas: the frozen or fresh pizza.

A hospitality expert, head of leisure and hospitality at a major consultancy, notes that not only have retailers been selling good-standard ready-to-bake pizzas for years – some are even offering countertop ovens.

“Evolving preferences are also having an impact in the performance of quick-service brands,” says Mr. Hawkley.

The rising popularity of low-carb regimens has increased sales at grilled chicken brands, while reducing sales of high-carbohydrate options, he continues.

Because people visit restaurants more rarely, they may look for a more upscale outing, and Pizza Hut's American-diner style with vinyl benches and red and white checked plastic table cloths can feel more old-fashioned than luxurious.

The growth of premium pizza outlets” over the last 10 to 15 years, including new entrants, has “completely altered the public's perception of what good pizza is,” says the industry commentator.

“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 downfall,” she states.
“Who would choose to spend nearly eighteen pounds on a modest, low-quality, underwhelming pizza from a chain 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 a no-brainer.”
An independent operator, who operates Smokey Deez based in a regional area explains: “The issue isn’t that fallen out of love with pizza – they just want higher quality at a fair price.”

He says his adaptable business can offer premium pizza at accessible prices, and that Pizza Hut faced challenges because it failed to adapt with evolving tastes.

At an independent chain in a UK location, the founder says the sector is diversifying but Pizza Hut has neglected to introduce anything new.

“You now have individual slices, London pizza, new haven, fermented dough, traditional Italian, deep-dish – it's a delightful challenge for a pizza enthusiast to explore.”

He says Pizza Hut “must rebrand” as the youth don't have any emotional connection or attachment to the brand.

Gradually, Pizza Hut's customer base has been fragmented and spread to its fresher, faster rivals. To sustain its expensive staffing and restaurants, it would have to raise prices – which industry analysts say is difficult at a time when household budgets are shrinking.

The managing director of Pizza Hut's international markets said the rescue aimed “to ensure our guest experience and save employment where possible”.

The executive stated its immediate priority was to continue operating at the remaining 64 restaurants and takeaway hubs and to support colleagues through the restructure.

However with large sums going into operating its locations, it probably cannot to allocate significant resources in its takeaway operation because the industry is “complex and partnering with existing external services comes at a cost”, experts say.

But, he adds, lowering overhead by exiting crowded locations could be a effective strategy to adapt.

Douglas Wilson
Douglas Wilson

A seasoned construction engineer with over 15 years of experience, specializing in sustainable building practices and innovative project management.