Why the Public Turned Away from Its Craving for Pizza Hut
In the past, the popular pizza chain was the top choice for families and friends to enjoy its all-you-can-eat buffet, endless salad selection, and ice cream with toppings.
However a declining number of customers are visiting the brand currently, and it is shutting down a significant portion of its UK locations after being rescued from insolvency for the second occasion this calendar year.
“We used to go Pizza Hut when I was a child,” notes a young adult. “It was a tradition, you'd go on a Sunday – make a day of it.” But now, in her mid-twenties, 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 started in the UK in the mid-20th century are now less appealing.
“How they do their all-you-can-eat and their salad station, it seems as if they are cutting corners and have lower standards... They provide so much food and you're like ‘How?’”
Because grocery costs have risen sharply, Pizza Hut's buffet-style service has become very expensive to run. The same goes for its restaurants, which are being reduced from a large number to just over 60.
The business, in common with competitors, has also seen its costs rise. Earlier this year, employee wages increased due to rises in minimum wages and an increase in employer social security payments.
A couple in their thirties and twenties explain they used to go 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 selection, Pizza Hut and Domino's rates are similar, explains an industry analyst.
While Pizza Hut provides off-premise options through delivery platforms, it is losing out to big rivals which specialize to the delivery sector.
“Another pizza company has succeeded in leading the takeaway pizza sector thanks to aggressive marketing and frequent offers that make customers feel like they're saving money, when in reality the base costs are on the higher side,” notes the analyst.
But for the couple it is acceptable to get their evening together delivered to their door.
“We predominantly have meals at home now instead of we eat out,” comments one of the diners, reflecting recent statistics that show a decline in people going to informal dining spots.
During the summer months, casual and fast-food restaurants saw a notable decrease in diners compared to the previous year.
Additionally, another rival to ordered-in pies: the frozen or fresh pizza.
An industry leader, senior partner at an advisory group, explains that not only have retailers been providing premium oven-ready pizzas for a long time – some are even promoting home-pizza ovens.
“Shifts in habits are also contributing in the performance of casual eateries,” states the expert.
The increased interest of low-carb regimens has driven sales at chicken shops, while hitting sales of carb-heavy pizza, he notes.
Because people dine out more rarely, they may prefer a more high-quality meal, and Pizza Hut's classic look with booth seating and nostalgic table settings can feel more old-fashioned than premium.
The growth of premium pizza outlets” over the last decade and a half, including popular brands, has “fundamentally changed the consumer view of what good pizza is,” explains the food expert.
“A thin, flavorful, gentle crust with a carefully curated additions, not the excessively rich, thick and crowded pizzas of the past. That, I think, is what's led to Pizza Hut's decline,” she comments.
“Who would choose to spend a high price on a modest, low-quality, underwhelming pizza from a large brand when you can get a stunning, expertly crafted traditional pie for a lower price at one of the many real Italian restaurants around the country?
“It's an easy choice.”
Dan Puddle, who runs Smokey Deez based in a county in England says: “The issue isn’t that fallen out of love with pizza – they just want improved value.”
He says his flexible operation can offer gourmet pizza at accessible prices, and that Pizza Hut faced challenges because it could not keep up with new customer habits.
At Pizzarova in Bristol, owner Jack Lander says the pizza market is broadening but Pizza Hut has neglected to introduce anything innovative.
“There are now individual slices, London pizza, thin crust, sourdough, wood-fired, deep-dish – it's a wonderful array for a pizza enthusiast to explore.”
He says Pizza Hut “should transform” as younger people don't have any fond memories or attachment to the chain.
Over time, Pizza Hut's share has been fragmented and allocated to its more modern, agile alternatives. To keep up its high labor and location costs, it would have to increase costs – which commentators say is tough at a time when personal spending are tightening.
The leadership of Pizza Hut's international markets said the rescue aimed “to protect our dining experience and retain staff where possible”.
It was explained its key goal was to keep running at the remaining 64 restaurants and off-premise points and to assist staff through the change.
However with large sums going into maintaining its outlets, it probably cannot to spend heavily in its off-premise division because the market is “difficult and working with existing delivery apps comes at a price”, analysts say.
Still, experts suggest, lowering overhead by leaving crowded locations could be a smart move to adjust.