Why the Public Lost Interest in Its Craving for the Pizza Hut Chain
At one time, the popular pizza chain was the top choice for families and friends to indulge in its unlimited dining experience, help-yourself greens station, and ice cream with toppings.
But a declining number of patrons are frequenting the chain these days, and it is closing half of its British outlets after being acquired following financial trouble for the second time this calendar year.
“We used to go Pizza Hut when I was a child,” says one London shopper. “It was a tradition, you'd go on a Sunday – spend the whole day there.” Today, in her mid-twenties, she says “it's fallen out of favor.”
According to young customer Martina, some of the very things Pizza Hut has been recognized for since it started in the UK in the seventies are now not-so-hot.
“How they do their buffet and their salad bar, it appears that they are cheapening on their quality and have lower standards... They provide so much food and you're like ‘How?’”
Because grocery costs have soared, Pizza Hut's all-you-can-eat model has become increasingly pricey to maintain. Similarly, its locations, which are being cut from 132 to just over 60.
The business, similar to other firms, has also faced its costs go up. Earlier this year, staffing costs rose due to rises in minimum wages and an higher rate of employer taxes.
A couple in their thirties and twenties explain they would often visit at Pizza Hut for a date “every now and then”, but now they get delivery from another pizza brand and think Pizza Hut is “not good value”.
Depending on your choices, Pizza Hut and Domino's prices are close, says an industry analyst.
Even though Pizza Hut does offer pickup and delivery through external services, it is falling behind to major competitors which specialize to the delivery sector.
“The rival chain has managed to dominate the takeaway pizza sector thanks to intensive advertising and frequent offers that make consumers feel like they're finding a good deal, when in reality the base costs are quite high,” says the analyst.
However for these customers it is worth it to get their evening together delivered to their door.
“We absolutely dine at home now rather than we eat out,” comments the female customer, echoing recent statistics that show a drop in people frequenting informal dining spots.
In the warmer season, quick-service eateries saw a 6% drop in customers compared to the previous year.
Moreover, a further alternative to pizza from eateries: the supermarket pizza.
Will Hawkley, head of leisure and hospitality at an advisory group, notes that not only have grocery stores been selling high-quality oven-ready pizzas for quite a while – some are even promoting pizza-making appliances.
“Shifts in habits are also contributing in the popularity of fast-food chains,” says the expert.
The rising popularity of high protein diets has boosted sales at poultry outlets, while reducing sales of carb-heavy pizza, he adds.
Since people visit restaurants less frequently, they may look for a more high-quality meal, and Pizza Hut's retro theme with vinyl benches and traditional décor can feel more old-fashioned than upmarket.
The growth of high-quality pizzerias” over the last decade and a half, including boutique chains, has “fundamentally changed the general opinion of what excellent pie is,” says the food expert.
“A light, fresh, easy-to-digest product with a few choice toppings, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's led to Pizza Hut's struggles,” she states.
“Why would anyone spend a high price on a modest, low-quality, underwhelming pizza from a chain when you can get a beautiful, masterfully-made classic pizza for less than ten pounds at one of the many real Italian restaurants around the country?
“The decision is simple.”
A mobile pizza vendor, who owns a small business based in Suffolk comments: “It's not that stopped liking pizza – they just want improved value.”
He says his flexible operation can offer high-quality pie at reasonable rates, and that Pizza Hut had difficulty because it could not keep up with changing preferences.
According to an independent chain in a city in southwest England, the proprietor says the pizza market is broadening but Pizza Hut has not provided anything fresh.
“You now have slice concepts, regional varieties, thin crust, artisan base, Neapolitan, Detroit – it's a delightful challenge for a pizza-loving consumer to try.”
He says Pizza Hut “needs to reinvent itself” as the youth don't have any emotional connection or attachment to the company.
In recent years, Pizza Hut's share has been divided and allocated to its more modern, agile competitors. To sustain its high labor and location costs, it would have to raise prices – which commentators say is challenging at a time when household budgets are shrinking.
The leadership of Pizza Hut's international markets said the acquisition aimed “to safeguard our dining experience and protect jobs where possible”.
The executive stated its first focus was to keep running at the surviving locations and off-premise points and to help employees through the restructure.
However with so much money going into operating its locations, it may be unable to spend heavily in its takeaway operation because the market is “complicated and working with existing delivery apps comes at a expense”, commentators say.
Still, experts suggest, cutting its costs by leaving oversaturated towns and city centres could be a good way to adjust.