How the Country Lost Interest in Its Craving for Pizza Hut
At one time, the popular pizza chain was the go-to for groups and loved ones to indulge in its all-you-can-eat buffet, help-yourself greens station, and ice cream with toppings.
However not as many customers are frequenting the restaurant nowadays, and it is reducing 50% of its UK outlets after being bought out of administration for the second occasion this year.
“We used to go Pizza Hut when I was a child,” says one London shopper. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” But now, as a young adult, she comments “it's no longer popular.”
For a diner in her twenties, some of the very things Pizza Hut has been known and loved for since it opened in the UK in the seventies are now less appealing.
“The manner in which they do their buffet and their salad station, it feels like they are cutting corners and have reduced quality... They're giving away so much food and you're like ‘How can they?’”
Since grocery costs have increased significantly, Pizza Hut's all-you-can-eat model has become very expensive to maintain. As have its outlets, which are being sliced from over 130 to a smaller figure.
The company, like many others, has also faced its expenses go up. This spring, staffing costs rose due to higher minimum pay and an higher rate of employer national insurance contributions.
Chris, 36, and Joanne, 29 say they used to go at Pizza Hut for a date “occasionally”, but now they get delivery from a rival chain and think Pizza Hut is “not good value”.
Based on your selection, Pizza Hut and Domino's costs are comparable, explains a food expert.
Although Pizza Hut does offer takeaway and deliveries through external services, it is missing out to larger chains which solely cater to the delivery sector.
“Another pizza company has managed to dominate the delivery market thanks to intensive advertising and constantly running deals that make shoppers feel like they're getting a bargain, when in reality the original prices are quite high,” says the expert.
However for Chris and Joanne it is acceptable to get their special meal delivered to their door.
“We predominantly have meals at home now instead of we eat out,” explains one of the diners, reflecting latest data that show a drop in people frequenting casual and fast-food restaurants.
During the summer months, casual and fast-food restaurants saw a six percent decline in diners compared to the year before.
Moreover, another rival to pizza from eateries: the frozen or fresh pizza.
An industry leader, senior partner at a major consultancy, notes that not only have retailers been providing good-standard prepared pies for a long time – some are even selling home-pizza ovens.
“Lifestyle changes are also having an impact in the performance of casual eateries,” says Mr. Hawkley.
The increased interest of high protein diets has boosted sales at grilled chicken brands, while reducing sales of carb-heavy pizza, he continues.
Since people dine out more rarely, they may seek out a more upscale outing, and Pizza Hut's American-diner style with comfortable booths and red and white checked plastic table cloths can feel more old-fashioned than premium.
The “explosion of high-quality pizzerias” over the last 10 to 15 years, including popular brands, has “completely altered the consumer view of what good pizza is,” notes the culinary analyst.
“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 decline,” she states.
“What person would spend a high price on a small, substandard, disappointing pizza from a large brand when you can get a gorgeous, skillfully prepared traditional pie for less than ten pounds at one of the many real Italian restaurants around the country?
“The decision is simple.”
An independent operator, who operates a pizza van based in a county in England says: “People haven’t stopped liking pizza – they just want higher quality at a fair price.”
The owner says his flexible operation can offer premium pizza at reasonable rates, and that Pizza Hut had difficulty because it failed to adapt with new customer habits.
At Pizzarova in a city in southwest England, the proprietor says the industry is expanding but Pizza Hut has not provided anything innovative.
“You now have slice concepts, artisanal styles, New Haven-style, fermented dough, traditional Italian, deep-dish – it's a heavenly minefield for a pizza enthusiast to discover.”
Jack says Pizza Hut “should transform” as the youth don't have any fond memories or allegiance to the chain.
In recent years, Pizza Hut's customer base has been sliced up and distributed to its more modern, agile competitors. To sustain its high labor and location costs, it would have to raise prices – which experts say is tough at a time when household budgets are decreasing.
A senior executive of Pizza Hut's overseas branches said the buyout aimed “to safeguard our guest experience and retain staff where possible”.
He said its immediate priority was to maintain service at the remaining 64 restaurants and off-premise points and to help employees through the transition.
Yet with so much money going into maintaining its outlets, it likely can't afford to invest too much in its takeaway operation because the sector is “difficult and working with existing external services comes at a price”, experts say.
But, he adds, lowering overhead by withdrawing from oversaturated towns and city centres could be a effective strategy to evolve.