Why the Public Lost Interest in Its Appetite for the Pizza Hut Chain

In the past, Pizza Hut was the favorite for groups and loved ones to enjoy its eat-as-much-as-you-like offering, endless salad selection, and ice cream with toppings.

However fewer customers are choosing the restaurant currently, and it is shutting down a significant portion of its UK locations after being bought out of administration for the second occasion this year.

“We used to go Pizza Hut when I was a child,” notes one London shopper. “It was a tradition, you'd go on a Sunday – turn it into an event.” However, at present, as a young adult, she comments “it's fallen out of favor.”

In the view of a diner in her twenties, some of the very things Pizza Hut has been recognized for since it launched in the UK in the seventies are now less appealing.

“The manner in which they do their buffet and their salad bar, it appears that they are lowering standards and have reduced quality... They're giving away so much food and you're like ‘How?’”

Since ingredient expenses have soared, Pizza Hut's unlimited dining format has become increasingly pricey to run. Similarly, its outlets, which are being reduced from a large number to 64.

The company, in common with competitors, has also experienced its operating costs rise. In April this year, labor expenses rose due to rises in minimum wages and an increase in employer social security payments.

A couple in their thirties and twenties say they used to go at Pizza Hut for a date “every now and then”, but now they get delivery from a rival chain and think Pizza Hut is “too expensive”.

Depending on your selection, Pizza Hut and Domino's costs are close, explains an industry analyst.

Even though Pizza Hut has takeaway and deliveries through external services, it is falling behind to larger chains which focus exclusively to this market.

“Another pizza company has managed to dominate the takeaway pizza sector thanks to strong promotions and constantly running deals that make consumers feel like they're saving money, when in reality the base costs are on the higher side,” says the specialist.

But for these customers it is worth it to get their date night brought to their home.

“We definitely eat at home now instead of we eat out,” explains the female customer, echoing current figures that show a drop in people going to casual and fast-food restaurants.

Over the summer, quick-service eateries saw a 6% drop in diners compared to last summer.

Additionally, a further alternative to restaurant and takeaway pizzas: the cook-at-home oven pizza.

An industry leader, senior partner at a major consultancy, explains that not only have grocery stores been providing good-standard oven-ready pizzas for years – some are even offering home-pizza ovens.

“Shifts in habits are also contributing in the performance of casual eateries,” comments the expert.

The increased interest of low-carb regimens has increased sales at grilled chicken brands, while affecting sales of dough-based meals, he continues.

Since people go out to eat less frequently, they may look for a more premium experience, and Pizza Hut's retro theme with vinyl benches and nostalgic table settings can feel more dated than luxurious.

The growth of artisanal pizza places” over the last 10 to 15 years, including new entrants, has “dramatically shifted the public's perception of what good pizza is,” explains the culinary analyst.

“A light, fresh, easy-to-digest product with a carefully curated additions, not the excessively rich, thick and crowded pizzas of the past. That, I think, is what's led to Pizza Hut's downfall,” she says.

“Who would choose to spend £17.99 on a tiny, mediocre, unsatisfying pizza from a franchise when you can get a stunning, expertly crafted Margherita for a lower price at one of the many authentic Italian pizzerias around the country?

“It's an easy choice.”

A mobile pizza vendor, who owns a pizza van based in Suffolk comments: “It's not that fallen out of love with pizza – they just want improved value.”

Dan says his adaptable business can offer high-quality pie at reasonable rates, and that Pizza Hut had difficulty because it was unable to evolve with evolving tastes.

At an independent chain in a UK location, the founder says the industry is broadening but Pizza Hut has failed to offer anything new.

“You now have by-the-slice options, London pizza, thin crust, sourdough, wood-fired, Detroit – it's a wonderful array for a pizza enthusiast to try.”

The owner says Pizza Hut “must rebrand” as the youth don't have any emotional connection or attachment to the company.

Over time, Pizza Hut's market has been sliced up and distributed to its more modern, agile alternatives. To maintain its costly operations, it would have to charge more – which experts say is difficult at a time when personal spending are tightening.

The managing director of Pizza Hut's global operations said the acquisition aimed “to ensure our customer service and protect jobs where possible”.

He said its first focus was to keep running at the open outlets and takeaway hubs and to help employees through the restructure.

However with large sums going into operating its locations, it probably cannot to allocate significant resources in its off-premise division because the market is “complicated and using existing external services comes at a cost”, analysts say.

Still, experts suggest, cutting its costs by withdrawing from competitive urban areas could be a smart move to adjust.