Why the Public Lost Interest in Its Appetite for Pizza Hut

At one time, the popular pizza chain was the favorite for families and friends to feast on its eat-as-much-as-you-like offering, help-yourself greens station, and self-serve ice-cream.

However not as many diners are frequenting the chain currently, and it is reducing half of its UK outlets after being rescued from insolvency for the second instance this calendar year.

I remember going Pizza Hut when I was a child,” explains one London shopper. “It was like a family thing, you'd go on a Sunday – spend the whole day there.” However, at present, as a young adult, she states “it's not a thing anymore.”

For young customer Martina, the very elements Pizza Hut has been known and loved for since it started in the UK in the mid-20th century are now less appealing.

“The way they do their all-you-can-eat and their salad station, it seems as if they are lowering standards and have inferior offerings... They offer so much food and you're like ‘How can they?’”

Because food prices have increased significantly, Pizza Hut's all-you-can-eat model has become quite costly to operate. As have its locations, which are being sliced from 132 to 64.

The chain, in common with competitors, has also experienced its operating costs increase. Earlier this year, labor expenses rose due to rises in minimum wages and an higher rate of employer taxes.

Two diners explain they would often visit at Pizza Hut for a date “every now and then”, but now they order in Domino's and think Pizza Hut is “too expensive”.

Based on your choices, Pizza Hut and Domino's rates are close, explains an industry analyst.

While Pizza Hut does offer pickup and delivery through external services, it is falling behind to larger chains which solely cater to the delivery sector.

“Domino's has taken over the delivery market thanks to intensive advertising and ongoing discounts that make customers feel like they're getting a bargain, when in reality the base costs are relatively expensive,” explains the specialist.

But for these customers it is justified to get their evening together delivered to their door.

“We predominantly have meals at home now instead of we eat out,” comments one of the diners, echoing recent statistics that show a decline in people going to informal dining spots.

Over the summer, quick-service eateries saw a six percent decline in customers compared to last summer.

Moreover, another rival to restaurant and takeaway pizzas: the cook-at-home oven pizza.

Will Hawkley, global lead for leisure at a leading firm, points out that not only have retailers been selling premium oven-ready pizzas for years – some are even offering home-pizza ovens.

“Lifestyle changes are also playing a factor in the success of casual eateries,” states the analyst.

The growing trend of high protein diets has boosted sales at grilled chicken brands, while affecting sales of high-carbohydrate options, he notes.

Because people visit restaurants less frequently, they may seek out a more upscale outing, and Pizza Hut's classic look with vinyl benches and traditional décor can feel more retro than upmarket.

The “explosion of premium pizza outlets” over the last several years, including boutique chains, has “completely altered the public's perception of what quality pizza is,” says the industry commentator.

“A crisp, airy, digestible pizza with a carefully curated additions, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's resulted in Pizza Hut's downfall,” she says.
“Why would anyone spend £17.99 on a modest, low-quality, underwhelming pizza from a chain when you can get a gorgeous, skillfully prepared classic pizza for under a tenner at one of the many authentic Italian pizzerias around the country?
“The decision is simple.”
An independent operator, who runs a pizza van based in a regional area comments: “The issue isn’t that fallen out of love with pizza – they just want better pizza for their money.”

Dan says his flexible operation can offer premium pizza at accessible prices, and that Pizza Hut struggled because it could not keep up with changing preferences.

According to a small pizza brand in a UK location, owner Jack Lander says the pizza market is broadening but Pizza Hut has not provided anything fresh.

“You now have by-the-slice options, artisanal styles, new haven, artisan base, traditional Italian, deep-dish – it's a heavenly minefield for a pie fan to try.”

He says Pizza Hut “should transform” as the youth don't have any fond memories or loyalty to the chain.

Over time, Pizza Hut's customer base has been fragmented and allocated to its trendier, more nimble competitors. To keep up its expensive staffing and restaurants, it would have to increase costs – which commentators say is tough at a time when household budgets are shrinking.

A senior executive of Pizza Hut's overseas branches said the rescue aimed “to protect our dining experience and protect jobs where possible”.

The executive stated its first focus was to continue operating at the remaining 64 restaurants and off-premise points and to help employees through the change.

However with large sums going into running its restaurants, it may be unable to spend heavily in its off-premise division because the industry is “complicated and working with existing external services comes at a price”, experts say.

However, it's noted, lowering overhead by exiting oversaturated towns and city centres could be a effective strategy to evolve.

David Fleming
David Fleming

A seasoned real estate expert with over 15 years of experience specializing in the Roman property market, dedicated to helping clients find their perfect home.