How the Country Lost Its Taste for Pizza Hut
Once, the popular pizza chain was the go-to for parents and children to enjoy its unlimited dining experience, endless salad selection, and self-serve ice-cream.
But a declining number of diners are visiting the brand these days, and it is closing half of its British outlets after being rescued from insolvency for the second time this year.
It was common to visit Pizza Hut when I was a child,” notes a young adult. “It was a regular outing, you'd go on a Sunday – turn it into an event.” Today, aged 24, she says “it's fallen out of favor.”
According to a diner in her twenties, the very elements Pizza Hut has been famous for since it launched in the UK in the mid-20th century are now outdated.
“The manner in which they do their buffet and their salad station, it feels like they are lowering standards and have reduced quality... They're giving away so much food and you're like ‘How?’”
Because grocery costs have risen sharply, Pizza Hut's buffet-style service has become increasingly pricey to operate. The same goes for its locations, which are being reduced from over 130 to 64.
The company, similar to other firms, has also faced its costs rise. This spring, staffing costs rose due to rises in minimum wages and an rise in employer social security payments.
Two diners say they would often visit at Pizza Hut for a date “from time to time”, but now they order in another pizza brand and think Pizza Hut is “very overpriced”.
Depending on your choices, Pizza Hut and Domino's prices are comparable, says a food expert.
Although Pizza Hut provides takeaway and deliveries through external services, it is losing out to big rivals which specialize to off-premise dining.
“Another pizza company has managed to dominate the off-premise pizza industry thanks to strong promotions and frequent offers that make shoppers feel like they're getting a bargain, when in reality the standard rates are relatively expensive,” notes the analyst.
Yet for these customers it is acceptable to get their special meal brought to their home.
“We predominantly have meals at home now rather than we eat out,” comments the female customer, echoing latest data that show a decrease in people visiting quick-service eateries.
Over the summer, quick-service eateries saw a 6% drop in diners compared to the year before.
There is also another rival to ordered-in pies: the cook-at-home oven pizza.
Will Hawkley, senior partner at a major consultancy, notes that not only have grocery stores been offering good-standard prepared pies for quite a while – some are even offering countertop ovens.
“Evolving preferences are also playing a factor in the performance of fast-food chains,” says the expert.
The increased interest of low-carb regimens has driven sales at chicken shops, while hitting sales of high-carbohydrate options, he notes.
As people dine out not as often, they may seek out a more high-quality meal, and Pizza Hut's American-diner style with booth seating and nostalgic table settings can feel more retro than upmarket.
The “explosion of high-quality pizzerias” over the last several years, for example boutique chains, has “fundamentally changed the general opinion of what quality pizza is,” says the industry commentator.
“A thin, flavorful, gentle crust 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 decline,” she states.
“What person would spend nearly eighteen pounds on a small, substandard, disappointing pizza from a franchise when you can get a beautiful, masterfully-made traditional pie for less than ten pounds at one of the many real Italian restaurants around the country?
“It's an easy choice.”
Dan Puddle, who operates a pizza van based in Suffolk comments: “The issue isn’t that lost interest in pizza – they just want improved value.”
The owner says his adaptable business can offer high-quality pie at affordable costs, and that Pizza Hut struggled because it failed to adapt with new customer habits.
From the perspective of a small pizza brand in a UK location, the founder says the sector is expanding but Pizza Hut has neglected to introduce anything new.
“There are now slice concepts, artisanal styles, thin crust, fermented dough, traditional Italian, deep-dish – it's a heavenly minefield for a pizza enthusiast to explore.”
The owner says Pizza Hut “must rebrand” as newer generations don't have any emotional connection or loyalty to the chain.
Over time, Pizza Hut's customer base has been sliced up and distributed to its more modern, agile alternatives. To maintain its expensive staffing and restaurants, it would have to raise prices – which commentators say is challenging at a time when household budgets are decreasing.
A senior executive of Pizza Hut's overseas branches said the buyout aimed “to ensure our guest experience and retain staff where possible”.
The executive stated its key goal was to maintain service at the open outlets and off-premise points and to assist staff through the transition.
Yet with so much money going into running its restaurants, it likely can't afford to allocate significant resources in its delivery service because the market is “complex and working with existing third-party platforms comes at a price”, commentators say.
But, he adds, cutting its costs by exiting competitive urban areas could be a good way to adapt.