How the Public Lost Its Appetite for the Pizza Hut Chain

In the past, the popular pizza chain was the go-to for groups and loved ones to enjoy its eat-as-much-as-you-like offering, help-yourself greens station, and ice cream with toppings.

But not as many customers are visiting the brand nowadays, and it is shutting down a significant portion of its British outlets after being acquired following financial trouble for the second time this calendar year.

“We used to go Pizza Hut when I was a child,” says a young adult. “It was a tradition, you'd go on a Sunday – spend the whole day there.” But now, in her mid-twenties, she says “it's no longer popular.”

In the view of a diner in her twenties, certain features Pizza Hut has been famous for since it launched in the UK in the mid-20th century are now not-so-hot.

“The manner in which they do their buffet and their salad station, it feels like they are cheapening on their quality and have reduced quality... They offer so much food and you're like ‘How?’”

Because food prices have increased significantly, Pizza Hut's buffet-style service has become increasingly pricey to operate. As have its outlets, which are being sliced from 132 to 64.

The chain, like many others, has also experienced its expenses increase. In April this year, employee wages increased due to higher minimum pay and an higher rate of employer social security payments.

Chris, 36, and Joanne, 29 mention they would often visit at Pizza Hut for a date “from time to time”, but now they choose Domino's and think Pizza Hut is “too expensive”.

According to your selection, Pizza Hut and Domino's prices are comparable, notes an industry analyst.

Although Pizza Hut does offer takeaway and deliveries through third-party apps, it is losing out to big rivals which focus exclusively to this market.

“The rival chain has succeeded in leading the takeaway pizza sector thanks to intensive advertising and ongoing discounts that make customers feel like they're finding a good deal, when in reality the base costs are on the higher side,” notes the specialist.

Yet for these customers it is acceptable to get their special meal delivered to their door.

“We absolutely dine at home now rather than we eat out,” explains Joanne, reflecting recent statistics that show a decrease in people going to informal dining spots.

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

Moreover, another rival to restaurant and takeaway pizzas: the frozen or fresh pizza.

Will Hawkley, head of leisure and hospitality at a major consultancy, points out that not only have retailers been selling premium oven-ready pizzas for years – some are even promoting pizza-making appliances.

“Shifts in habits are also playing a factor in the popularity of casual eateries,” states the analyst.

The increased interest of low-carb regimens has increased sales at grilled chicken brands, while hitting sales of carb-heavy pizza, he notes.

As people visit restaurants not as often, they may seek out a more premium experience, and Pizza Hut's American-diner style with booth seating and nostalgic table settings can feel more retro than premium.

The “explosion of high-quality pizzerias” over the last several years, such as new entrants, has “dramatically shifted the public's perception of what good pizza is,” says the industry commentator.

“A thin, flavorful, gentle crust with a few choice toppings, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's led to Pizza Hut's decline,” she comments.
“What person would spend nearly eighteen pounds on a modest, low-quality, underwhelming pizza from a large brand when you can get a beautiful, masterfully-made Margherita for a lower price at one of the many traditional pizzerias around the country?
“It's an easy choice.”
Dan Puddle, who operates a pizza van based in a county in England comments: “It's not that stopped liking pizza – they just want improved value.”

He says his flexible operation can offer premium pizza at affordable costs, and that Pizza Hut had difficulty because it was unable to evolve with changing preferences.

At a small pizza brand in a UK location, the founder says the pizza market is diversifying but Pizza Hut has neglected to introduce anything fresh.

“Currently available are slice concepts, artisanal styles, new haven, sourdough, wood-fired, Detroit – it's a wonderful array for a pie fan to explore.”

Jack says Pizza Hut “should transform” as younger people don't have any fond memories or attachment to the chain.

Gradually, Pizza Hut's customer base has been sliced up and distributed to its more modern, agile alternatives. To maintain its high labor and location costs, it would have to raise prices – which experts say is challenging at a time when family finances are tightening.

The managing director of Pizza Hut's international markets said the acquisition aimed “to protect our dining experience and retain staff where possible”.

The executive stated its first focus was to continue operating at the open outlets and delivery sites and to assist staff through the transition.

But with large sums going into running its restaurants, it probably cannot to invest too much in its takeaway operation because the sector is “complex and working with existing third-party platforms comes at a cost”, analysts say.

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

Adam Jackson
Adam Jackson

Cybersecurity specialist with over a decade of experience in data protection and IT consulting.