Why the Country Turned Away from Its Appetite for Pizza Hut
In the past, the popular pizza chain was the top choice for families and friends to enjoy its unlimited dining experience, help-yourself greens station, and make-your-own dessert.
However fewer diners are visiting the chain currently, and it is closing 50% of its UK restaurants after being acquired following financial trouble for the second time this year.
I remember going Pizza Hut when I was a child,” explains a young adult. “It was a regular outing, you'd go on a Sunday – turn it into an event.” However, at present, as a young adult, she comments “it's not a thing anymore.”
According to a diner in her twenties, some of the very things Pizza Hut has been known and loved for since it started in the UK in the mid-20th century are now less appealing.
“The manner in which they do their all-you-can-eat and their salad station, it seems as if they are lowering standards and have reduced quality... They offer so much food and you're like ‘How can they?’”
Since ingredient expenses have increased significantly, Pizza Hut's unlimited dining format has become very expensive to operate. The same goes for its outlets, which are being cut from 132 to 64.
The business, similar to other firms, has also experienced its costs go up. Earlier this year, labor expenses increased due to higher minimum pay and an higher rate of employer social security payments.
A couple in their thirties and twenties explain they would often visit at Pizza Hut for a date “occasionally”, but now they get delivery from Domino's and think Pizza Hut is “too expensive”.
Based on your choices, Pizza Hut and Domino's costs are similar, says a culinary author.
Although Pizza Hut does offer takeaway and deliveries through delivery platforms, it is losing out to big rivals which solely cater to off-premise dining.
“The rival chain has managed to dominate the takeaway pizza sector thanks to aggressive marketing and ongoing discounts that make consumers feel like they're finding a good deal, when in reality the standard rates are relatively expensive,” says the expert.
Yet for these customers it is justified to get their evening together brought to their home.
“We absolutely dine at home now more than we eat out,” says Joanne, reflecting recent statistics that show a drop in people going to quick-service eateries.
In the warmer season, informal dining venues saw a notable decrease in patrons compared to the year before.
There is also another rival to ordered-in pies: the cook-at-home oven pizza.
An industry leader, global lead for leisure at a major consultancy, explains that not only have retailers been offering high-quality prepared pies for years – some are even selling home-pizza ovens.
“Shifts in habits are also having an impact in the success of casual eateries,” states the expert.
The growing trend of protein-rich eating plans has boosted sales at chicken shops, while hitting sales of dough-based meals, he notes.
Because people visit restaurants not as often, they may prefer a more high-quality meal, and Pizza Hut's classic look with booth seating and red and white checked plastic table cloths can feel more old-fashioned than premium.
The rise of artisanal pizza places” over the last several years, for example popular brands, has “dramatically shifted the public's perception of what excellent pie is,” notes the food expert.
“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 resulted in Pizza Hut's struggles,” she says.
“Who would choose to spend nearly eighteen pounds on a tiny, mediocre, unsatisfying pizza from a large brand when you can get a stunning, expertly crafted Margherita for under a tenner at one of the many traditional pizzerias around the country?
“It's an easy choice.”
An independent operator, who owns a small business based in a county in England comments: “It's not that lost interest in pizza – they just want improved value.”
He says his flexible operation can offer premium pizza at reasonable rates, and that Pizza Hut had difficulty because it was unable to evolve with new customer habits.
At Pizzarova in a UK location, the founder says the industry is expanding but Pizza Hut has not provided anything fresh.
“You now have by-the-slice options, regional varieties, New Haven-style, sourdough, wood-fired, Detroit – it's a wonderful array for a pie fan to discover.”
He says Pizza Hut “should transform” as newer generations don't have any sense of nostalgia or loyalty to the company.
Over time, Pizza Hut's market has been fragmented and spread to its fresher, faster alternatives. To keep up its expensive staffing and restaurants, it would have to charge more – which industry analysts say is challenging at a time when family finances are decreasing.
The managing director of Pizza Hut's international markets said the rescue aimed “to safeguard our customer service and retain staff where possible”.
He said its first focus was to keep running at the surviving locations and takeaway hubs and to help employees through the restructure.
However with significant funds going into running its restaurants, it likely can't afford to invest too much in its off-premise division because the market is “complex and using existing delivery apps comes at a cost”, analysts say.
However, it's noted, reducing expenses by withdrawing from competitive urban areas could be a smart move to adapt.