How the Public Lost Its Appetite for Pizza Hut

In the past, the popular pizza chain was the favorite for parents and children to enjoy its all-you-can-eat buffet, endless salad selection, and self-serve ice-cream.

However a declining number of diners are visiting the restaurant currently, and it is reducing a significant portion of its UK locations after being bought out of administration for the second time this year.

I remember going Pizza Hut when I was a child,” says one London shopper. “It was like a family thing, you'd go on a Sunday – spend the whole day there.” But now, as a young adult, she says “it's no longer popular.”

In the view of a diner in her twenties, the very elements Pizza Hut has been known and loved for since it opened in the UK in the mid-20th century are now not-so-hot.

“How they do their buffet and their salad station, it seems as if they are cutting corners and have reduced quality... They offer so much food and you're like ‘How?’”

Since ingredient expenses have increased significantly, Pizza Hut's all-you-can-eat model has become quite costly to operate. As have its locations, which are being reduced from a large number to just over 60.

The business, like many others, has also faced its expenses go up. In April this year, labor expenses increased due to rises in minimum wages and an increase in employer social security payments.

Chris, 36, and Joanne, 29 explain they would often visit at Pizza Hut for a date “occasionally”, but now they order in Domino's and think Pizza Hut is “very overpriced”.

According to your selection, Pizza Hut and Domino's costs are comparable, notes a food expert.

While Pizza Hut has takeaway and deliveries through delivery platforms, it is falling behind to big rivals which focus exclusively to the delivery sector.

“Another pizza company has managed to dominate the delivery market thanks to strong promotions and constantly running deals that make customers feel like they're saving money, when in reality the original prices are on the higher side,” notes the expert.

Yet for Chris and Joanne it is acceptable to get their date night delivered to their door.

“We absolutely dine at home now more than we eat out,” comments the female customer, matching latest data that show a decrease in people visiting informal dining spots.

In the warmer season, quick-service eateries saw a 6% drop in diners compared to the year before.

Moreover, another rival to pizza from eateries: the frozen or fresh pizza.

A hospitality expert, head of leisure and hospitality at a major consultancy, notes that not only have retailers been offering good-standard prepared pies for a long time – some are even selling countertop ovens.

“Shifts in habits are also having an impact in the popularity of casual eateries,” comments the expert.

The increased interest of high protein diets has increased sales at grilled chicken brands, while reducing sales of high-carbohydrate options, he continues.

Because people dine out less frequently, they may look for a more high-quality meal, and Pizza Hut's retro theme with booth seating and traditional décor can feel more retro than premium.

The rise of high-quality pizzerias” over the last decade and a half, for example boutique chains, has “fundamentally changed the consumer view of what excellent pie is,” says the food expert.

“A thin, flavorful, gentle crust with a carefully curated additions, not the excessively rich, thick and crowded pizzas of the past. That, I think, is what's resulted in Pizza Hut's decline,” she states.
“What person would spend nearly eighteen pounds on a small, substandard, disappointing pizza from a franchise when you can get a beautiful, masterfully-made traditional pie for a lower price at one of the many traditional pizzerias around the country?
“The decision is simple.”
A mobile pizza vendor, who operates Smokey Deez based in a regional area comments: “The issue isn’t that fallen out of love with pizza – they just want higher quality at a fair price.”

He says his flexible operation can offer premium pizza at affordable costs, and that Pizza Hut struggled because it could not keep up with evolving tastes.

According to Pizzarova in a city in southwest England, the founder says the pizza market is expanding but Pizza Hut has failed to offer anything new.

“You now have individual slices, London pizza, new haven, artisan base, traditional Italian, deep-dish – it's a delightful challenge for a pie fan to try.”

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

In recent years, Pizza Hut's share has been fragmented and allocated to its fresher, faster alternatives. To maintain its costly operations, it would have to increase costs – which experts say is challenging at a time when household budgets are shrinking.

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

The executive stated its immediate priority was to keep running at the open outlets and delivery sites and to assist staff through the change.

However with so much money going into maintaining its outlets, it may be unable to invest too much in its takeaway operation because the industry is “complex and using existing delivery apps comes at a price”, analysts say.

But, he adds, lowering overhead by exiting crowded locations could be a effective strategy to evolve.

Kimberly Adams
Kimberly Adams

Financial analyst with over a decade of experience in global markets and economic forecasting.