Why the Nation Lost Its Appetite for Pizza Hut

Once, the popular pizza chain was the top choice for families and friends to feast on its unlimited dining experience, unlimited salad bar, and make-your-own dessert.

But fewer customers are visiting the restaurant these days, and it is shutting down 50% of its UK outlets after being acquired following financial trouble for the second occasion this calendar year.

It was common to visit Pizza Hut when I was a child,” says a young adult. “It was like a family thing, you'd go on a Sunday – spend the whole day there.” Today, aged 24, she states “it's fallen out of favor.”

According to a diner in her twenties, the very elements Pizza Hut has been famous for since it launched in the UK in the 1970s are now less appealing.

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

Since grocery costs have soared, Pizza Hut's all-you-can-eat model has become quite costly to maintain. Similarly, its restaurants, which are being sliced from over 130 to just over 60.

The company, in common with competitors, has also seen its expenses go up. This spring, employee wages increased due to higher minimum pay and an higher rate of employer taxes.

Two diners say they frequently dined at Pizza Hut for a date “from time to time”, but now they choose a rival chain and think Pizza Hut is “very overpriced”.

According to your choices, Pizza Hut and Domino's prices are similar, explains an industry analyst.

Although Pizza Hut provides pickup and delivery through external services, it is falling behind to major competitors which focus exclusively to the delivery sector.

“Another pizza company has managed to dominate the delivery market thanks to aggressive marketing and frequent offers that make customers feel like they're saving money, when in reality the base costs are relatively expensive,” says the analyst.

But for the couple it is worth it to get their evening together brought to their home.

“We absolutely dine at home now more than we eat out,” says the female customer, reflecting latest data that show a decline in people going to quick-service eateries.

During the summer months, informal dining venues saw a six percent decline in diners compared to the previous year.

There is also a further alternative to ordered-in pies: the frozen or fresh pizza.

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

“Lifestyle changes are also playing a factor in the performance of casual eateries,” states the analyst.

The rising popularity of protein-rich eating plans has driven sales at chicken shops, while affecting sales of carb-heavy pizza, he adds.

Because people go out to eat more rarely, they may seek out a more upscale outing, and Pizza Hut's retro theme with booth seating and red and white checked plastic table cloths can feel more retro than premium.

The “explosion of premium pizza outlets” over the last 10 to 15 years, such as new entrants, has “dramatically shifted the public's perception of what excellent pie is,” explains the industry commentator.

“A thin, flavorful, gentle crust with a few choice toppings, not the excessively rich, thick and crowded pizzas of the past. That, arguably, is what's caused Pizza Hut's downfall,” she says.
“Why would anyone spend £17.99 on a modest, low-quality, underwhelming pizza from a franchise when you can get a gorgeous, skillfully prepared classic pizza for a lower price at one of the many real Italian restaurants around the country?
“It's a no-brainer.”
An independent operator, who operates a small business based in a regional area comments: “It's not that stopped liking pizza – they just want improved value.”

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

According to Pizzarova in a UK location, the founder says the pizza market is diversifying but Pizza Hut has failed to offer anything new.

“Currently available are individual slices, London pizza, new haven, fermented dough, wood-fired, rectangular – it's a delightful challenge for a pie fan to discover.”

The owner says Pizza Hut “must rebrand” as the youth don't have any fond memories or allegiance to the company.

Over time, Pizza Hut's customer base has been divided and distributed to its fresher, faster rivals. To sustain its costly operations, it would have to raise prices – which commentators say is tough at a time when family finances are decreasing.

A senior executive of Pizza Hut's international markets said the buyout aimed “to ensure our guest experience and save employment where possible”.

He said its first focus was to maintain service at the surviving locations and takeaway hubs and to assist staff through the change.

But with significant funds going into maintaining its outlets, it likely can't afford to spend heavily in its off-premise division because the market is “complex and working with existing third-party platforms comes at a expense”, experts say.

However, it's noted, cutting its costs by withdrawing from crowded locations could be a smart move to evolve.

Sheila Orozco
Sheila Orozco

A passionate local guide with over 10 years of experience in sharing Bergamo's rich history and hidden gems with visitors from around the world.