How the Public Lost Interest in Its Appetite for the Pizza Hut Chain
At one time, the popular pizza chain was the top choice for families and friends to indulge in its all-you-can-eat buffet, unlimited salad bar, and ice cream with toppings.
However a declining number of diners are choosing the restaurant nowadays, and it is shutting down a significant portion of its UK outlets after being acquired following financial trouble for the second occasion this calendar year.
I remember going Pizza Hut when I was a child,” notes a young adult. “It was like a family thing, you'd go on a Sunday – turn it into an event.” Today, aged 24, she says “it's not a thing anymore.”
In the view of a diner in her twenties, some of the very things Pizza Hut has been known and loved for since it started 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 cutting corners and have reduced quality... They provide so much food and you're like ‘How?’”
As ingredient expenses have risen sharply, Pizza Hut's all-you-can-eat model has become quite costly to run. The same goes for its outlets, which are being reduced from a large number to 64.
The chain, like many others, has also experienced its operating costs rise. In April this year, staffing costs increased due to increases in the legal wage floor and an increase in employer taxes.
Two diners explain they would often visit at Pizza Hut for a date “from time to time”, but now they choose Domino's and think Pizza Hut is “very overpriced”.
Depending on your order, Pizza Hut and Domino's costs are similar, notes a food expert.
While Pizza Hut provides pickup and delivery through external services, it is losing out to big rivals which solely cater to off-premise dining.
“Another pizza company has managed to dominate the delivery market thanks to strong promotions and ongoing discounts that make consumers feel like they're getting a bargain, when in reality the original prices are relatively expensive,” notes the specialist.
However for the couple it is worth it to get their special meal sent directly.
“We predominantly have meals at home now instead of we eat out,” explains one of the diners, reflecting latest data that show a decrease in people visiting casual and fast-food restaurants.
Over the summer, casual and fast-food restaurants saw a notable decrease in patrons compared to last summer.
Moreover, one more competitor to pizza from eateries: the frozen or fresh pizza.
Will Hawkley, global lead for leisure at a major consultancy, notes that not only have retailers been offering good-standard prepared pies for years – some are even offering pizza-making appliances.
“Lifestyle changes are also contributing in the success of casual eateries,” says the expert.
The increased interest of protein-rich eating plans has boosted sales at grilled chicken brands, while reducing sales of dough-based meals, he adds.
Since people go out to eat less frequently, they may look for a more upscale outing, and Pizza Hut's classic look with booth seating and nostalgic table settings can feel more retro than upmarket.
The growth of high-quality pizzerias” over the last 10 to 15 years, for example popular brands, has “dramatically shifted the public's perception of what quality pizza is,” explains the culinary analyst.
“A crisp, airy, digestible pizza with a few choice toppings, not the excessively rich, thick and crowded pizzas of the past. That, I think, is what's led to Pizza Hut's decline,” she states.
“Who would choose to spend nearly eighteen pounds on a tiny, mediocre, unsatisfying pizza from a chain when you can get a stunning, expertly crafted traditional pie for less than ten pounds at one of the many traditional pizzerias around the country?
“It's a no-brainer.”
An independent operator, who owns a small business based in a regional area explains: “It's not that fallen out of love with pizza – they just want improved value.”
Dan says his adaptable business can offer premium pizza at affordable costs, and that Pizza Hut had difficulty because it was unable to evolve with evolving tastes.
From the perspective of Pizzarova in a city in southwest England, owner Jack Lander says the sector is expanding but Pizza Hut has neglected to introduce anything innovative.
“There are now individual slices, London pizza, New Haven-style, artisan base, wood-fired, Detroit – it's a delightful challenge for a pizza enthusiast to explore.”
He says Pizza Hut “should transform” as newer generations don't have any sense of nostalgia or loyalty to the company.
Gradually, Pizza Hut's market has been divided and allocated to its fresher, faster competitors. To sustain its expensive staffing and restaurants, it would have to raise prices – which experts say is tough at a time when household budgets are decreasing.
The managing director of Pizza Hut's global operations said the buyout aimed “to safeguard our customer service and retain staff where possible”.
The executive stated its first focus was to maintain service at the surviving locations and delivery sites and to help employees through the transition.
Yet with significant funds going into running its restaurants, it may be unable to spend heavily in its off-premise division because the sector is “complex and working with existing delivery apps comes at a cost”, commentators say.
But, he adds, lowering overhead by withdrawing from crowded locations could be a good way to adapt.