Why the Nation Lost Its Appetite for Pizza Hut
At one time, Pizza Hut was the go-to for groups and loved ones to indulge in its all-you-can-eat buffet, endless salad selection, and self-serve ice-cream.
However not as many diners are visiting the brand nowadays, and it is closing 50% of its UK restaurants after being bought out of administration for the second instance this calendar year.
I remember going Pizza Hut when I was a child,” says one London shopper. “It was a tradition, you'd go on a Sunday – make a day of it.” However, at present, as a young adult, she says “it's not a thing anymore.”
For 23-year-old Martina, some of the very things Pizza Hut has been known and loved for since it opened in the UK in the seventies are now less appealing.
“The manner in which they do their buffet and their salad bar, it feels like they are cutting corners and have lower standards... They offer so much food and you're like ‘How can they?’”
As food prices have increased significantly, Pizza Hut's unlimited dining format has become very expensive to maintain. The same goes for its locations, which are being cut from over 130 to just over 60.
The chain, similar to other firms, has also seen its operating costs go up. Earlier this year, employee wages increased due to rises in minimum wages and an higher rate of employer taxes.
A couple in their thirties and twenties explain they frequently dined at Pizza Hut for a date “from time to time”, but now they order in another pizza brand and think Pizza Hut is “too expensive”.
Depending on your order, Pizza Hut and Domino's costs are close, notes an industry analyst.
While Pizza Hut does offer off-premise options through third-party apps, it is missing out to big rivals which focus exclusively to off-premise dining.
“Another pizza company has taken over the takeaway pizza sector thanks to strong promotions and constantly running deals that make customers feel like they're finding a good deal, when in reality the original prices are quite high,” explains the analyst.
Yet for these customers it is worth it to get their date night sent directly.
“We absolutely dine at home now more than we eat out,” says the female customer, echoing latest data that show a decline in people visiting quick-service eateries.
Over the summer, quick-service eateries saw a notable decrease in patrons compared to last summer.
Moreover, one more competitor to restaurant and takeaway pizzas: the frozen or fresh pizza.
Will Hawkley, global lead for leisure at a leading firm, explains that not only have grocery stores been offering high-quality ready-to-bake pizzas for a long time – some are even promoting home-pizza ovens.
“Evolving preferences are also playing a factor in the success of quick-service brands,” says the analyst.
The growing trend of low-carb regimens has driven sales at grilled chicken brands, while hitting sales of dough-based meals, he continues.
Since people dine out not as often, 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 upmarket.
The growth of artisanal pizza places” over the last 10 to 15 years, including new entrants, has “dramatically shifted the general opinion of what excellent pie is,” says the culinary analyst.
“A crisp, airy, digestible pizza with a few choice toppings, not the excessively rich, thick and crowded pizzas of the past. This, in my view, is what's resulted in Pizza Hut's struggles,” she says.
“Why would anyone spend £17.99 on a modest, low-quality, underwhelming pizza from a large brand when you can get a gorgeous, skillfully prepared traditional pie for under a tenner at one of the many real Italian restaurants around the country?
“The decision is simple.”
A mobile pizza vendor, who owns a pizza van based in a regional area comments: “It's not that stopped liking pizza – they just want higher quality at a fair price.”
He says his adaptable business can offer gourmet pizza at reasonable rates, and that Pizza Hut faced challenges because it was unable to evolve with new customer habits.
From the perspective of Pizzarova in Bristol, the founder says the sector is diversifying but Pizza Hut has not provided anything new.
“You now have slice concepts, artisanal styles, new haven, fermented dough, wood-fired, deep-dish – it's a delightful challenge for a pizza-loving consumer to discover.”
He says Pizza Hut “must rebrand” as younger people don't have any fond memories or allegiance to the company.
Gradually, Pizza Hut's market has been fragmented and allocated to its trendier, more nimble alternatives. To keep up its expensive staffing and restaurants, it would have to raise prices – which commentators say is tough at a time when household budgets are decreasing.
A senior executive of Pizza Hut's global operations said the buyout aimed “to safeguard our guest experience and save employment where possible”.
He said its immediate priority was to keep running at the surviving locations and off-premise points and to help employees through the change.
Yet with significant funds going into operating its locations, it likely can't afford to spend heavily in its delivery service because the market is “difficult and partnering with existing delivery apps comes at a cost”, commentators say.
Still, experts suggest, reducing expenses by leaving crowded locations could be a good way to evolve.