Why the Nation Lost Interest in Its Appetite for Pizza Hut
In the past, the popular pizza chain was the top choice for families and friends to feast on its all-you-can-eat buffet, unlimited salad bar, and self-serve ice-cream.
But a declining number of patrons are frequenting the restaurant currently, and it is reducing a significant portion of its UK locations after being bought out of administration for the second instance this calendar year.
It was common to visit 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.” Today, in her mid-twenties, she says “it's fallen out of favor.”
For young customer Martina, some of the very things Pizza Hut has been famous for since it opened in the UK in the 1970s are now outdated.
“The way they do their buffet and their salad station, it feels like they are cutting corners and have inferior offerings... They're giving away so much food and you're like ‘How is that possible?’”
As ingredient expenses have risen sharply, Pizza Hut's all-you-can-eat model has become very expensive to maintain. As have its locations, which are being sliced from a large number to just over 60.
The company, like many others, has also seen its expenses increase. In April this year, employee wages jumped due to increases in the legal wage floor and an higher rate of employer social security payments.
Two diners explain they frequently dined at Pizza Hut for a date “from time to time”, but now they choose Domino's and think Pizza Hut is “too expensive”.
According to your choices, Pizza Hut and Domino's costs are comparable, says a food expert.
While Pizza Hut does offer takeaway and deliveries through delivery platforms, it is falling behind to major competitors which solely cater to this market.
“The rival chain has succeeded in leading the delivery market thanks to intensive advertising and frequent offers that make consumers feel like they're finding a good deal, when in reality the standard rates are relatively expensive,” explains the analyst.
Yet for these customers it is acceptable to get their special meal sent directly.
“We absolutely dine at home now instead of we eat out,” explains the female customer, matching current figures that show a decrease in people going to quick-service eateries.
During the summer months, casual and fast-food restaurants saw a six percent decline in patrons compared to the year before.
Moreover, one more competitor to restaurant and takeaway pizzas: the cook-at-home oven pizza.
A hospitality expert, head of leisure and hospitality at a leading firm, explains that not only have grocery stores been offering premium oven-ready pizzas for a long time – some are even selling home-pizza ovens.
“Shifts in habits are also having an impact in the performance of quick-service brands,” comments the analyst.
The rising popularity of high protein diets has driven sales at grilled chicken brands, while reducing sales of carb-heavy pizza, he adds.
Since people dine out more rarely, they may prefer a more upscale outing, and Pizza Hut's American-diner style with booth seating and traditional décor can feel more old-fashioned than luxurious.
The “explosion of artisanal pizza places” over the last 10 to 15 years, for example new entrants, has “dramatically shifted the general opinion of what quality pizza is,” notes the food expert.
“A crisp, airy, digestible pizza with a select ingredients, not the overly oily, dense and piled-high pizzas of the past. That, I think, is what's resulted in Pizza Hut's struggles,” she states.
“Who would choose to spend nearly eighteen pounds on a tiny, mediocre, unsatisfying pizza from a large brand when you can get a stunning, expertly crafted Margherita for under a tenner at one of the many traditional pizzerias around the country?
“It's a no-brainer.”
An independent operator, who owns a pizza van based in a regional area explains: “People haven’t stopped liking 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 failed to adapt with changing preferences.
According to a small pizza brand in a UK location, owner Jack Lander says the sector is broadening but Pizza Hut has not provided anything fresh.
“Currently available are individual slices, artisanal styles, new haven, sourdough, traditional Italian, rectangular – it's a wonderful array for a pizza-loving consumer to discover.”
Jack says Pizza Hut “must rebrand” as newer generations don't have any sense of nostalgia or loyalty to the chain.
In recent years, Pizza Hut's customer base has been sliced up and spread to its trendier, more nimble competitors. To sustain its costly operations, it would have to increase costs – which industry analysts say is challenging at a time when personal spending are decreasing.
The leadership of Pizza Hut's overseas branches said the rescue aimed “to safeguard our dining experience and protect jobs where possible”.
It was explained its immediate priority was to continue operating at the open outlets and delivery sites and to support colleagues through the change.
Yet with large sums going into maintaining its outlets, it probably cannot to invest too much in its takeaway operation because the market is “complicated and partnering with existing third-party platforms comes at a price”, analysts say.
But, he adds, reducing expenses by withdrawing from crowded locations could be a smart move to evolve.