Why the Nation Lost Interest in Its Appetite for the Pizza Hut Chain
At one time, Pizza Hut was the top choice for families and friends to enjoy its eat-as-much-as-you-like offering, endless salad selection, and ice cream with toppings.
Yet fewer diners are visiting the chain nowadays, and it is shutting down 50% of its UK locations after being acquired following financial trouble for the second time this calendar year.
I remember going Pizza Hut when I was a child,” explains a young adult. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” But now, as a young adult, she states “it's no longer popular.”
According to a diner in her twenties, some of the very things Pizza Hut has been famous for since it launched in the UK in the mid-20th century are now less appealing.
“The manner in which they do their all-you-can-eat and their salad bar, it seems as if they are cutting corners and have lower standards... They provide so much food and you're like ‘How can they?’”
As ingredient expenses have increased significantly, Pizza Hut's all-you-can-eat model has become increasingly pricey to operate. The same goes for its restaurants, which are being sliced from over 130 to 64.
The company, like many others, has also seen its operating costs rise. In April this year, labor expenses jumped due to increases in the legal wage floor and an increase in employer national insurance contributions.
A couple in their thirties and twenties explain they would often visit at Pizza Hut for a date “occasionally”, but now they order in a rival chain and think Pizza Hut is “too expensive”.
Depending on your order, Pizza Hut and Domino's prices are close, says an industry analyst.
While Pizza Hut does offer takeaway and deliveries through external services, it is falling behind to big rivals which specialize to this market.
“The rival chain has managed to dominate the takeaway pizza sector thanks to intensive advertising and ongoing discounts that make shoppers feel like they're saving money, when in reality the standard rates are on the higher side,” notes the analyst.
But for these customers it is justified to get their date night sent directly.
“We predominantly have meals at home now more than we eat out,” explains Joanne, echoing latest data that show a drop in people going to quick-service eateries.
In the warmer season, informal dining venues saw a 6% drop in diners compared to the year before.
There is also one more competitor to pizza from eateries: the cook-at-home oven pizza.
A hospitality expert, global lead for leisure at a leading firm, explains that not only have retailers been offering high-quality ready-to-bake pizzas for a long time – some are even promoting pizza-making appliances.
“Shifts in habits are also playing a factor in the popularity of casual eateries,” states the expert.
The rising popularity of high protein diets has driven sales at poultry outlets, while reducing sales of high-carbohydrate options, he continues.
Since people dine out less frequently, they may prefer a more high-quality meal, and Pizza Hut's American-diner style with booth seating and red and white checked plastic table cloths can feel more dated than upmarket.
The rise of high-quality pizzerias” over the last several years, such as popular brands, has “completely altered the public's perception of what quality pizza is,” says the food expert.
“A crisp, airy, digestible pizza with a select ingredients, not the massively greasy, heavy and overloaded pizzas of the past. That, I think, is what's resulted in Pizza Hut's struggles,” she comments.
“Who would choose to spend nearly eighteen pounds on a modest, low-quality, underwhelming pizza from a chain 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 a no-brainer.”
Dan Puddle, who operates a small business based in Suffolk comments: “It's not that lost interest in pizza – they just want higher quality at a fair price.”
He says his flexible operation can offer high-quality pie at affordable costs, and that Pizza Hut faced challenges because it was unable to evolve with changing preferences.
According to Pizzarova in a UK location, the founder says the pizza market is broadening but Pizza Hut has failed to offer anything fresh.
“Currently available are individual slices, regional varieties, new haven, fermented dough, wood-fired, rectangular – it's a wonderful array for a pie fan to try.”
He says Pizza Hut “must rebrand” as newer generations don't have any sense of nostalgia or allegiance to the chain.
In recent years, Pizza Hut's customer base has been sliced up and distributed to its more modern, agile rivals. To sustain its costly operations, it would have to increase costs – which industry analysts say is difficult at a time when family finances are shrinking.
The managing director of Pizza Hut's overseas branches said the buyout aimed “to ensure our customer service and retain staff where possible”.
It was explained its immediate priority was to maintain service at the open outlets and takeaway hubs and to help employees through the change.
But with large sums going into operating its locations, it may be unable to spend heavily in its delivery service because the sector is “complex and working with existing third-party platforms comes at a cost”, analysts say.
However, it's noted, lowering overhead by exiting crowded locations could be a effective strategy to evolve.