How the Country Turned Away from Its Appetite for the Pizza Hut Chain
Once, Pizza Hut was the top choice for families and friends to enjoy its all-you-can-eat buffet, unlimited salad bar, and ice cream with toppings.
Yet not as many diners are visiting the chain nowadays, and it is shutting down a significant portion of its British restaurants after being rescued from insolvency for the second time this year.
It was common to visit Pizza Hut when I was a child,” explains a young adult. “It was like a family thing, you'd go on a Sunday – turn it into an event.” Today, aged 24, she states “it's not a thing anymore.”
According to 23-year-old Martina, certain features Pizza Hut has been famous for since it launched in the UK in the seventies are now not-so-hot.
“The way they do their buffet and their salad bar, it feels like they are lowering standards and have lower standards... They're giving away so much food and you're like ‘How is that possible?’”
Since ingredient expenses have increased significantly, Pizza Hut's buffet-style service has become very expensive to maintain. The same goes for its outlets, which are being sliced from over 130 to just over 60.
The business, in common with competitors, has also experienced its costs go up. Earlier this year, employee wages rose due to rises in minimum wages and an increase in employer national insurance contributions.
A couple in their thirties and twenties say they used to go at Pizza Hut for a date “occasionally”, but now they get delivery from Domino's and think Pizza Hut is “not good value”.
Based on your selection, Pizza Hut and Domino's rates are similar, notes an industry analyst.
While Pizza Hut does offer takeaway and deliveries through delivery platforms, it is falling behind to big rivals which solely cater to the delivery sector.
“Domino's has taken over the off-premise pizza industry thanks to aggressive marketing and frequent offers that make customers feel like they're finding a good deal, when in reality the base costs are quite high,” explains the expert.
Yet for these customers it is acceptable to get their special meal brought to their home.
“We predominantly have meals at home now instead of we eat out,” comments the female customer, matching latest data that show a drop in people going to informal dining spots.
Over the summer, informal dining venues saw a six percent decline in diners compared to the year before.
There is also one more competitor to ordered-in pies: 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 providing premium ready-to-bake pizzas for quite a while – some are even selling pizza-making appliances.
“Lifestyle changes are also having an impact in the success of fast-food chains,” states the expert.
The increased interest of protein-rich eating plans has increased sales at chicken shops, while hitting sales of carb-heavy pizza, he continues.
Since people dine out more rarely, they may prefer a more high-quality meal, and Pizza Hut's retro theme with booth seating and traditional décor can feel more retro than upmarket.
The “explosion of artisanal pizza places” over the last decade and a half, such as new entrants, has “fundamentally changed the public's perception of what quality pizza is,” explains the food expert.
“A light, fresh, easy-to-digest product with a few choice toppings, not the overly oily, dense and piled-high pizzas of the past. That, arguably, is what's caused Pizza Hut's struggles,” she says.
“What person would spend £17.99 on a tiny, mediocre, unsatisfying pizza from a chain when you can get a beautiful, masterfully-made Margherita for a lower price at one of the many authentic Italian pizzerias around the country?
“It's a no-brainer.”
An independent operator, who operates a small business based in a county in England explains: “It's not that fallen out of love with pizza – they just want better pizza for their money.”
He says his mobile setup can offer gourmet pizza at reasonable rates, and that Pizza Hut had difficulty because it failed to adapt with evolving tastes.
According to an independent chain in a UK location, owner Jack Lander says the sector is diversifying but Pizza Hut has neglected to introduce anything fresh.
“There are now by-the-slice options, artisanal styles, new haven, artisan base, wood-fired, Detroit – it's a wonderful array for a pizza-loving consumer to try.”
He says Pizza Hut “must rebrand” as younger people don't have any fond memories or attachment to the chain.
Over time, Pizza Hut's share has been divided and distributed to its more modern, agile rivals. To maintain its high labor and location costs, it would have to charge more – which commentators say is challenging at a time when household budgets are tightening.
The managing director of Pizza Hut's international markets said the buyout aimed “to ensure our guest experience and retain staff where possible”.
It was explained its immediate priority was to continue operating at the open outlets and takeaway hubs and to help employees through the transition.
However with significant funds going into operating its locations, it probably cannot to allocate significant resources in its delivery service because the market is “difficult and partnering with existing external services comes at a cost”, experts say.
But, he adds, cutting its costs by leaving oversaturated towns and city centres could be a effective strategy to adjust.