Why the Nation Lost Its Taste for the Pizza Hut Chain
Once, Pizza Hut was the top choice for groups and loved ones to feast on its eat-as-much-as-you-like offering, unlimited salad bar, and self-serve ice-cream.
But fewer customers are frequenting the chain these days, and it is closing 50% of its UK locations after being acquired following financial trouble for the second instance this year.
“We used to go Pizza Hut when I was a child,” says a young adult. “It was like a family thing, you'd go on a Sunday – turn it into an event.” But now, as a young adult, she says “it's not a thing anymore.”
For young customer Martina, some of the very things Pizza Hut has been recognized 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 lowering standards and have lower standards... They offer so much food and you're like ‘How is that possible?’”
As ingredient expenses have soared, Pizza Hut's buffet-style service has become increasingly pricey to maintain. Similarly, its locations, which are being cut from a large number to 64.
The company, in common with competitors, has also seen its expenses go up. Earlier this year, employee wages rose due to higher minimum pay and an rise in employer social security payments.
A couple in their thirties and twenties say they frequently dined at Pizza Hut for a date “occasionally”, but now they get delivery from a rival chain and think Pizza Hut is “too expensive”.
Based on your choices, Pizza Hut and Domino's prices are comparable, notes an industry analyst.
While Pizza Hut does offer off-premise options through external services, it is missing out to larger chains which focus exclusively to the delivery sector.
“The rival chain has taken over the delivery market thanks to aggressive marketing and ongoing discounts that make shoppers feel like they're getting a bargain, when in reality the original prices are quite high,” explains the analyst.
However for these customers it is acceptable to get their date night sent directly.
“We absolutely dine at home now instead of we eat out,” says one of the diners, matching current figures that show a drop in people frequenting quick-service eateries.
In the warmer season, casual and fast-food restaurants saw a six percent decline in diners compared to the previous year.
Moreover, a further alternative to restaurant and takeaway pizzas: the frozen or fresh pizza.
An industry leader, head of leisure and hospitality at a leading firm, notes that not only have supermarkets been offering high-quality ready-to-bake pizzas for years – some are even offering countertop ovens.
“Evolving preferences are also playing a factor in the popularity of fast-food chains,” comments the analyst.
The increased interest of low-carb regimens has increased sales at grilled chicken brands, while affecting sales of high-carbohydrate options, he notes.
As people visit restaurants less frequently, they may prefer a more upscale outing, and Pizza Hut's American-diner style with vinyl benches and nostalgic table settings can feel more dated than premium.
The “explosion of artisanal pizza places” over the last several years, for example popular brands, has “fundamentally changed the public's perception of what excellent pie is,” says the culinary analyst.
“A light, fresh, easy-to-digest product with a carefully curated additions, not the overly oily, dense and piled-high pizzas of the past. This, in my view, is what's resulted in Pizza Hut's struggles,” she comments.
“What person would spend nearly eighteen pounds on a modest, low-quality, underwhelming pizza from a large brand when you can get a stunning, expertly crafted classic pizza for a lower price at one of the many traditional pizzerias around the country?
“The decision is simple.”
Dan Puddle, who runs Smokey Deez based in a county in England explains: “People haven’t fallen out of love with pizza – they just want improved value.”
The owner says his adaptable business can offer gourmet pizza at affordable costs, and that Pizza Hut faced challenges because it could not keep up with new customer habits.
From the perspective of a small pizza brand in a UK location, owner Jack Lander says the pizza market is diversifying but Pizza Hut has not provided anything innovative.
“There are now by-the-slice options, artisanal styles, New Haven-style, sourdough, Neapolitan, Detroit – it's a wonderful array for a pie fan to try.”
Jack says Pizza Hut “must rebrand” as younger people don't have any sense of nostalgia or attachment to the chain.
Gradually, Pizza Hut's customer base has been fragmented and allocated to its trendier, more nimble competitors. To sustain its costly operations, it would have to raise prices – which industry analysts say is challenging at a time when family finances are shrinking.
The leadership of Pizza Hut's overseas branches said the acquisition aimed “to protect our guest experience and protect jobs where possible”.
The executive stated its first focus was to maintain service at the remaining 64 restaurants and off-premise points and to assist staff through the transition.
But with so much money going into operating its locations, it probably cannot to invest too much in its off-premise division because the industry is “difficult and partnering with existing delivery apps comes at a price”, analysts say.
But, he adds, cutting its costs by leaving competitive urban areas could be a smart move to adjust.