Why the Country Lost Its Appetite for the Pizza Hut Chain

At one time, Pizza Hut was the top choice for groups and loved ones to feast on its all-you-can-eat buffet, unlimited salad bar, and self-serve ice-cream.

However not as many diners are frequenting the brand nowadays, and it is shutting down 50% of its British locations after being acquired following financial trouble for the second instance this year.

I remember going Pizza Hut when I was a child,” explains Prudence. “It was a regular outing, you'd go on a Sunday – make a day of it.” But now, in her mid-twenties, she comments “it's fallen out of favor.”

For young customer Martina, certain features Pizza Hut has been famous for since it launched in the UK in the 1970s are now not-so-hot.

“The way they do their all-you-can-eat and their salad bar, it feels like they are lowering standards and have inferior offerings... They're giving away so much food and you're like ‘How is that possible?’”

Because grocery costs have risen sharply, Pizza Hut's all-you-can-eat model has become increasingly pricey to run. The same goes for its restaurants, which are being cut from a large number to 64.

The business, like many others, has also seen its operating costs go up. Earlier this year, staffing costs jumped due to higher minimum pay and an higher rate of employer taxes.

Two diners mention they would often visit at Pizza Hut for a date “from time to time”, but now they get delivery from Domino's and think Pizza Hut is “too expensive”.

According to your order, Pizza Hut and Domino's prices are comparable, says a food expert.

While Pizza Hut provides takeaway and deliveries through external services, it is falling behind to larger chains which specialize to the delivery sector.

“The rival chain has managed to dominate the takeaway pizza sector thanks to aggressive marketing and constantly running deals that make shoppers feel like they're finding a good deal, when in reality the base costs are on the higher side,” says the expert.

But for Chris and Joanne it is justified to get their date night sent directly.

“We definitely eat at home now instead of we eat out,” comments one of the diners, matching latest data that show a decrease in people frequenting quick-service eateries.

In the warmer season, informal dining venues saw a 6% drop in patrons compared to last summer.

Moreover, a further alternative to ordered-in pies: the cook-at-home oven pizza.

An industry leader, head of leisure and hospitality at an advisory group, points out that not only have retailers been offering premium oven-ready pizzas for years – some are even offering home-pizza ovens.

“Lifestyle changes are also having an impact in the success of casual eateries,” says the analyst.

The increased interest of low-carb regimens has driven sales at poultry outlets, while affecting sales of high-carbohydrate options, he notes.

As people dine out more rarely, they may seek out a more premium experience, and Pizza Hut's retro theme with comfortable booths and nostalgic table settings can feel more dated than luxurious.

The growth of premium pizza outlets” over the last decade and a half, for example popular brands, has “fundamentally changed the public's perception of what quality pizza is,” says the food expert.

“A light, fresh, easy-to-digest product with a carefully curated additions, not the excessively rich, thick and crowded pizzas of the past. This, in my view, is what's led to Pizza Hut's decline,” she comments.
“Why would anyone spend a high price on a small, substandard, disappointing pizza from a chain when you can get a stunning, expertly crafted traditional pie for less than ten pounds at one of the many real Italian restaurants around the country?
“It's a no-brainer.”
An independent operator, who operates Smokey Deez based in Suffolk says: “It's not that fallen out of love with pizza – they just want better pizza for their money.”

Dan says his flexible operation can offer gourmet pizza at accessible prices, and that Pizza Hut had difficulty because it was unable to evolve with new customer habits.

According to Pizzarova in a city in southwest England, the founder says the sector is broadening but Pizza Hut has failed to offer anything innovative.

“You now have by-the-slice options, artisanal styles, new haven, sourdough, Neapolitan, Detroit – it's a wonderful array for a pie fan to try.”

The owner says Pizza Hut “needs to reinvent itself” as younger people don't have any emotional connection or attachment to the company.

In recent years, Pizza Hut's share has been divided and allocated to its more modern, agile rivals. To maintain its costly operations, it would have to charge more – which commentators say is challenging at a time when personal spending are shrinking.

A senior executive of Pizza Hut's international markets said the rescue aimed “to safeguard our customer service and retain staff where possible”.

He said its key goal was to maintain service at the remaining 64 restaurants and delivery sites and to help employees through the transition.

Yet with significant funds going into running its restaurants, it may be unable to invest too much in its off-premise division because the sector is “complex and partnering with existing third-party platforms comes at a expense”, commentators say.

However, it's noted, reducing expenses by leaving oversaturated towns and city centres could be a good way to adapt.

Sue Graham
Sue Graham

Digital strategist and entrepreneur with over a decade of experience in helping businesses innovate and scale through technology.