Why the Country Lost Its Craving for the Pizza Hut Chain
At one time, Pizza Hut was the top choice for parents and children to indulge in its eat-as-much-as-you-like offering, unlimited salad bar, and self-serve ice-cream.
But not as many customers are visiting the chain nowadays, and it is closing half of its UK outlets after being bought out of administration for the second time this year.
“We used to go Pizza Hut when I was a child,” notes Prudence. “It was a tradition, you'd go on a Sunday – make a day of it.” However, at present, as a young adult, she states “it's no longer popular.”
For a diner in her twenties, the very elements Pizza Hut has been recognized for since it opened in the UK in the 1970s are now outdated.
“The way they do their all-you-can-eat and their salad station, it seems as if they are cheapening on their quality and have lower standards... They provide so much food and you're like ‘How is that possible?’”
Because food prices have risen sharply, Pizza Hut's unlimited dining format has become increasingly pricey to run. Similarly, its locations, which are being sliced from over 130 to 64.
The chain, in common with competitors, has also seen its operating costs rise. In April this year, staffing costs jumped due to higher minimum pay and an higher rate of employer national insurance contributions.
Chris, 36, and Joanne, 29 explain they would often visit at Pizza Hut for a date “from time to time”, but now they get delivery from a rival chain and think Pizza Hut is “too expensive”.
According to your selection, Pizza Hut and Domino's costs are similar, explains a food expert.
Even though Pizza Hut does offer off-premise options through external services, it is missing out to big rivals which specialize to off-premise dining.
“Another pizza company has succeeded in leading the off-premise pizza industry thanks to aggressive marketing and ongoing discounts that make customers feel like they're getting a bargain, when in reality the base costs are quite high,” says the specialist.
However for the couple it is justified to get their evening together brought to their home.
“We predominantly have meals at home now rather than we eat out,” comments the female customer, matching recent statistics that show a decline in people visiting quick-service eateries.
During the summer months, informal dining venues saw a notable decrease in diners compared to the year before.
There is also another rival to restaurant and takeaway pizzas: the supermarket pizza.
Will Hawkley, senior partner at a leading firm, points out that not only have retailers been selling premium prepared pies for a long time – some are even selling home-pizza ovens.
“Shifts in habits are also having an impact in the popularity of casual eateries,” says Mr. Hawkley.
The increased interest of high protein diets has driven sales at grilled chicken brands, while reducing sales of dough-based meals, he adds.
Since people dine out more rarely, they may look for a more premium experience, and Pizza Hut's retro theme with vinyl benches and nostalgic table settings can feel more old-fashioned than upmarket.
The rise of high-quality pizzerias” over the last decade and a half, for example boutique chains, has “fundamentally changed the public's perception of what good pizza is,” explains the industry commentator.
“A thin, flavorful, gentle crust with a carefully curated additions, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's caused Pizza Hut's struggles,” she comments.
“Why would anyone spend £17.99 on a small, substandard, disappointing pizza from a franchise when you can get a stunning, expertly crafted Margherita for less than ten pounds at one of the many authentic Italian pizzerias around the country?
“It's a no-brainer.”
A mobile pizza vendor, who operates Smokey Deez based in a regional area comments: “People haven’t stopped liking pizza – they just want better pizza for their money.”
He says his adaptable business can offer premium pizza at accessible prices, and that Pizza Hut faced challenges because it failed to adapt with new customer habits.
From the perspective of Pizzarova in Bristol, the founder says the pizza market is broadening but Pizza Hut has neglected to introduce anything fresh.
“You now have by-the-slice options, London pizza, new haven, sourdough, wood-fired, deep-dish – it's a wonderful array for a pizza-loving consumer to discover.”
The owner says Pizza Hut “should transform” as newer generations don't have any sense of nostalgia or loyalty to the chain.
Over time, Pizza Hut's share has been divided and allocated to its fresher, faster competitors. To sustain its costly operations, it would have to raise prices – which experts say is challenging at a time when household budgets are tightening.
The leadership of Pizza Hut's global operations said the buyout aimed “to protect our dining experience and protect jobs where possible”.
He said its key goal was to continue operating at the surviving locations and delivery sites and to assist staff through the transition.
Yet with large sums going into operating its locations, it may be unable to invest too much in its off-premise division because the market is “difficult and using existing external services comes at a expense”, experts say.
Still, experts suggest, cutting its costs by leaving competitive urban areas could be a smart move to adjust.