Why the Country Lost Interest in Its Craving for Pizza Hut
At one time, Pizza Hut was the top choice for families and friends to feast on its all-you-can-eat buffet, endless salad selection, and self-serve ice-cream.
But not as many customers are choosing the chain currently, and it is reducing 50% of its British outlets after being rescued from insolvency for the second time this calendar year.
I remember going Pizza Hut when I was a child,” explains one London shopper. “It was like a family thing, you'd go on a Sunday – spend the whole day there.” However, at present, aged 24, she says “it's no longer popular.”
In the view of young customer Martina, the very elements Pizza Hut has been known and loved for since it launched in the UK in the seventies are now outdated.
“The way they do their all-you-can-eat and their salad station, it seems as if they are cheapening on their quality and have inferior offerings... They offer so much food and you're like ‘How is that possible?’”
Because food prices have soared, Pizza Hut's buffet-style service has become increasingly pricey to run. The same goes for its outlets, which are being reduced from over 130 to just over 60.
The company, like many others, has also faced its operating costs rise. Earlier this year, staffing costs jumped due to increases in the legal wage floor and an higher rate of employer national insurance contributions.
Two diners explain they frequently dined at Pizza Hut for a date “occasionally”, but now they order in Domino's and think Pizza Hut is “not good value”.
According to your order, Pizza Hut and Domino's costs are similar, notes an industry analyst.
Although Pizza Hut provides off-premise options through third-party apps, it is falling behind to larger chains which solely cater to the delivery sector.
“Domino's has taken over the delivery market thanks to strong promotions and constantly running deals that make customers feel like they're getting a bargain, when in reality the standard rates are on the higher side,” notes the analyst.
However for Chris and Joanne it is justified to get their special meal delivered to their door.
“We definitely eat at home now rather than we eat out,” comments Joanne, reflecting latest data that show a decline in people visiting casual and fast-food restaurants.
Over the summer, informal dining venues saw a 6% drop in customers compared to last summer.
There is also another rival to pizza from eateries: the frozen or fresh pizza.
Will Hawkley, head of leisure and hospitality at a major consultancy, notes that not only have grocery stores been providing premium ready-to-bake pizzas for quite a while – some are even offering pizza-making appliances.
“Shifts in habits are also playing a factor in the success of quick-service brands,” states the analyst.
The rising popularity of low-carb regimens has boosted sales at chicken shops, while hitting sales of dough-based meals, he adds.
Because people visit restaurants more rarely, they may seek out a more upscale outing, and Pizza Hut's retro theme with booth seating and nostalgic table settings can feel more retro than upmarket.
The “explosion of high-quality pizzerias” over the last decade and a half, including new entrants, has “completely altered the general opinion of what excellent pie is,” says the food expert.
“A thin, flavorful, gentle crust with a carefully curated additions, not the excessively rich, thick and crowded pizzas of the past. This, in my view, is what's resulted in Pizza Hut's downfall,” she says.
“What person would spend a high price on a tiny, mediocre, unsatisfying pizza from a large brand when you can get a beautiful, masterfully-made traditional pie for less than ten pounds at one of the many traditional pizzerias around the country?
“The decision is simple.”
Dan Puddle, who runs a pizza van based in a county in England comments: “It's not that stopped liking pizza – they just want better pizza for their money.”
Dan says his adaptable business can offer high-quality pie at affordable costs, and that Pizza Hut struggled because it could not keep up with changing preferences.
From the perspective of an independent chain in Bristol, the founder says the pizza market is expanding but Pizza Hut has failed to offer anything fresh.
“You now have slice concepts, London pizza, new haven, fermented dough, wood-fired, Detroit – it's a heavenly minefield for a pizza-loving consumer to try.”
He says Pizza Hut “should transform” as younger people don't have any sense of nostalgia or loyalty to the brand.
Gradually, Pizza Hut's market has been divided and allocated to its more modern, agile competitors. To maintain its expensive staffing and restaurants, it would have to raise prices – which commentators say is challenging at a time when household budgets are tightening.
A senior executive of Pizza Hut's overseas branches said the acquisition aimed “to ensure our guest experience and protect jobs where possible”.
He said its key goal was to maintain service at the surviving locations and off-premise points and to help employees through the restructure.
However with significant funds going into operating its locations, it may be unable to invest too much in its off-premise division because the market is “complicated and working with existing external services comes at a expense”, analysts say.
However, it's noted, reducing expenses by leaving oversaturated towns and city centres could be a effective strategy to adjust.