How the Country Lost Its Taste for the Pizza Hut Chain
In the past, the popular pizza chain was the top choice for parents and children to enjoy its all-you-can-eat buffet, help-yourself greens station, and ice cream with toppings.
However not as many patrons are visiting the restaurant nowadays, and it is reducing 50% of its British locations after being rescued from insolvency for the second instance this year.
I remember going Pizza Hut when I was a child,” notes one London shopper. “It was a tradition, you'd go on a Sunday – turn it into an event.” Today, aged 24, she comments “it's fallen out of favor.”
For a diner in her twenties, the very elements Pizza Hut has been known and loved for since it launched in the UK in the 1970s are now less appealing.
“How they do their buffet and their salad station, it appears that they are lowering standards and have inferior offerings... They offer so much food and you're like ‘How is that possible?’”
Since food prices have risen sharply, Pizza Hut's buffet-style service has become increasingly pricey to run. As have its locations, which are being reduced from a large number to 64.
The business, similar to other firms, has also seen its operating costs increase. Earlier this year, staffing costs increased due to rises in minimum wages and an higher rate of employer social security payments.
Chris, 36, and Joanne, 29 mention they frequently dined at Pizza Hut for a date “occasionally”, but now they order in a rival chain and think Pizza Hut is “very overpriced”.
According to your selection, Pizza Hut and Domino's rates are similar, explains an industry analyst.
Although Pizza Hut provides off-premise options through external services, it is falling behind to larger chains which specialize to the delivery sector.
“Another pizza company has succeeded in leading the off-premise pizza industry thanks to strong promotions and constantly running deals that make shoppers feel like they're getting a bargain, when in reality the base costs are on the higher side,” says the specialist.
However for these customers it is justified to get their evening together brought to their home.
“We definitely eat at home now rather than we eat out,” says Joanne, matching current figures that show a decrease in people visiting casual and fast-food restaurants.
Over the summer, informal dining venues saw a 6% drop in patrons compared to the previous year.
There is also a further alternative to ordered-in pies: the cook-at-home oven pizza.
Will Hawkley, global lead for leisure at an advisory group, points out that not only have supermarkets been offering premium ready-to-bake pizzas for quite a while – some are even selling home-pizza ovens.
“Lifestyle changes are also contributing in the performance of fast-food chains,” says Mr. Hawkley.
The growing trend of low-carb regimens has driven sales at poultry outlets, while reducing sales of carb-heavy pizza, he notes.
Because people dine out less frequently, they may prefer a more premium experience, and Pizza Hut's classic look with booth seating and nostalgic table settings can feel more dated than upmarket.
The “explosion of high-quality pizzerias” over the last decade and a half, for example popular brands, has “completely altered the general opinion of what excellent pie is,” says the industry commentator.
“A crisp, airy, digestible pizza with a few choice toppings, not the excessively rich, thick and crowded pizzas of the past. That, arguably, is what's led to Pizza Hut's downfall,” she says.
“Who would choose to spend £17.99 on a tiny, mediocre, unsatisfying pizza from a franchise 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 owns a small business based in a regional area explains: “The issue isn’t that stopped liking pizza – they just want better pizza for their money.”
Dan says his flexible operation can offer gourmet pizza at affordable costs, and that Pizza Hut had difficulty because it could not keep up with new customer habits.
From the perspective of an independent chain in a city in southwest England, owner Jack Lander says the pizza market is diversifying but Pizza Hut has not provided anything fresh.
“Currently available are slice concepts, artisanal styles, New Haven-style, sourdough, Neapolitan, rectangular – it's a heavenly minefield for a pizza enthusiast to discover.”
He says Pizza Hut “needs to reinvent itself” as newer generations don't have any sense of nostalgia or loyalty to the chain.
Over time, Pizza Hut's customer base has been sliced up and distributed to its more modern, agile competitors. To maintain its expensive staffing and restaurants, it would have to increase costs – which experts say is tough at a time when family finances are tightening.
A senior executive of Pizza Hut's international markets said the rescue aimed “to protect our dining experience and protect jobs where possible”.
It was explained its key goal was to continue operating at the remaining 64 restaurants and takeaway hubs and to assist staff through the transition.
Yet with so much money going into maintaining its outlets, it likely can't afford to spend heavily in its off-premise division because the sector is “difficult and partnering with existing external services comes at a expense”, experts say.
However, it's noted, reducing expenses by exiting oversaturated towns and city centres could be a effective strategy to adapt.