How the Country Turned Away from Its Taste for the Pizza Hut Chain
Once, Pizza Hut was the top choice for groups and loved ones to indulge in its all-you-can-eat buffet, help-yourself greens station, and make-your-own dessert.
However not as many customers are visiting the restaurant these days, and it is closing a significant portion of its UK restaurants after being bought out of administration for the second time this year.
“We used to go Pizza Hut when I was a child,” says a young adult. “It was a tradition, you'd go on a Sunday – turn it into an event.” Today, in her mid-twenties, she says “it's not a thing anymore.”
According to a diner in her twenties, the very elements Pizza Hut has been recognized for since it launched in the UK in the seventies are now not-so-hot.
“How they do their all-you-can-eat and their salad bar, it seems as if they are lowering standards and have lower standards... They're giving away so much food and you're like ‘How?’”
As food prices have increased significantly, Pizza Hut's buffet-style service has become very expensive to operate. The same goes for its restaurants, which are being reduced from over 130 to 64.
The business, in common with competitors, has also seen its expenses rise. In April this year, labor expenses jumped due to increases in the legal wage floor and an rise in employer social security payments.
Two diners explain they frequently dined at Pizza Hut for a date “occasionally”, but now they get delivery from Domino's and think Pizza Hut is “very overpriced”.
Depending on your choices, Pizza Hut and Domino's costs are comparable, explains an industry analyst.
While Pizza Hut does offer takeaway and deliveries through delivery platforms, it is missing out to big rivals which solely cater to the delivery sector.
“The rival chain has succeeded in leading the takeaway pizza sector thanks to strong promotions and constantly running deals that make shoppers feel like they're finding a good deal, when in reality the base costs are on the higher side,” says the analyst.
Yet for Chris and Joanne it is acceptable to get their evening together brought to their home.
“We absolutely dine at home now more than we eat out,” explains one of the diners, reflecting latest data that show a decline in people going to informal dining spots.
Over the summer, quick-service eateries saw a six percent decline in patrons compared to the year before.
Additionally, one more competitor to restaurant and takeaway pizzas: the supermarket pizza.
A hospitality expert, senior partner at an advisory group, explains that not only have retailers been selling premium oven-ready pizzas for quite a while – some are even selling pizza-making appliances.
“Evolving preferences are also playing a factor in the performance of quick-service brands,” says the expert.
The growing trend of high protein diets has increased sales at chicken shops, while hitting sales of dough-based meals, he notes.
As people visit restaurants more rarely, they may prefer a more upscale outing, and Pizza Hut's retro theme with vinyl benches and nostalgic table settings can feel more dated than luxurious.
The growth of artisanal pizza places” over the last decade and a half, for example new entrants, has “completely altered the public's perception of what good pizza is,” notes the industry commentator.
“A light, fresh, easy-to-digest product with a carefully curated additions, not the overly oily, dense and piled-high pizzas of the past. That, I think, is what's led to Pizza Hut's downfall,” she states.
“Who would choose to spend a high price on a small, substandard, disappointing pizza from a chain when you can get a stunning, expertly crafted traditional pie for under a tenner at one of the many traditional pizzerias around the country?
“It's a no-brainer.”
A mobile pizza vendor, who operates a pizza van based in Suffolk says: “People haven’t lost interest in pizza – they just want better pizza for their money.”
The owner says his flexible operation can offer high-quality pie at reasonable rates, and that Pizza Hut faced challenges because it failed to adapt with changing preferences.
At an independent chain in a city in southwest England, the proprietor says the sector is expanding but Pizza Hut has failed to offer anything new.
“You now have slice concepts, London pizza, thin crust, sourdough, wood-fired, rectangular – it's a wonderful array for a pizza enthusiast to discover.”
The owner says Pizza Hut “needs to reinvent itself” as the youth don't have any fond memories or loyalty to the company.
Over time, Pizza Hut's customer base has been fragmented and distributed to its more modern, agile rivals. To keep up its costly operations, it would have to charge more – which industry analysts say is tough at a time when household budgets are shrinking.
The managing director of Pizza Hut's overseas branches said the acquisition aimed “to ensure our dining experience and save employment where possible”.
He said its first focus was to continue operating at the remaining 64 restaurants and off-premise points and to support colleagues through the change.
However with significant funds going into maintaining its outlets, it probably cannot to invest too much in its off-premise division because the market is “complicated and partnering with existing third-party platforms comes at a cost”, analysts say.
However, it's noted, cutting its costs by leaving competitive urban areas could be a good way to adapt.