Why the Nation Lost Its Craving for the Pizza Hut Chain

At one time, the popular pizza chain was the favorite for groups and loved ones to enjoy its all-you-can-eat buffet, endless salad selection, and self-serve ice-cream.

But a declining number of customers are visiting the restaurant nowadays, and it is shutting down 50% of its British restaurants after being rescued from insolvency for the second occasion this calendar year.

“We used to go Pizza Hut when I was a child,” notes Prudence. “It was a regular outing, you'd go on a Sunday – make a day of it.” However, at present, as a young adult, she states “it's fallen out of favor.”

For 23-year-old Martina, certain features Pizza Hut has been known and loved for since it opened in the UK in the mid-20th century are now outdated.

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

Since grocery costs have increased significantly, Pizza Hut's all-you-can-eat model has become very expensive to run. The same goes for its locations, which are being cut from over 130 to a smaller figure.

The chain, like many others, has also experienced its expenses increase. This spring, employee wages rose due to increases in the legal wage floor and an rise in employer taxes.

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 another pizza brand and think Pizza Hut is “not good value”.

Depending on your choices, Pizza Hut and Domino's rates are similar, says an industry analyst.

Although Pizza Hut does offer off-premise options through external services, it is falling behind to major competitors which solely cater to this market.

“The rival chain has managed to dominate the takeaway pizza sector thanks to strong promotions and ongoing discounts that make shoppers feel like they're getting a bargain, when in reality the standard rates are relatively expensive,” notes the analyst.

But for these customers it is acceptable to get their special meal sent directly.

“We definitely eat at home now rather than we eat out,” explains Joanne, reflecting latest data that show a decline in people frequenting casual and fast-food restaurants.

In the warmer season, casual and fast-food restaurants saw a 6% drop in diners compared to the previous year.

Additionally, one more competitor to pizza from eateries: the frozen or fresh pizza.

Will Hawkley, global lead for leisure at a leading firm, notes that not only have retailers been offering premium oven-ready pizzas for a long time – some are even offering pizza-making appliances.

“Shifts in habits are also having an impact in the popularity of fast-food chains,” comments the expert.

The growing trend of low-carb regimens has driven sales at chicken shops, while reducing sales of high-carbohydrate options, he adds.

As people go out to eat more rarely, they may look for a more high-quality meal, and Pizza Hut's classic look with vinyl benches and red and white checked plastic table cloths can feel more old-fashioned than luxurious.

The growth of high-quality pizzerias” over the last 10 to 15 years, such as boutique chains, has “completely altered the public's perception of what good pizza is,” notes the food expert.

“A crisp, airy, digestible pizza with a carefully curated additions, not the overly oily, dense and piled-high 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 large brand when you can get a stunning, expertly crafted traditional pie for under a tenner at one of the many authentic Italian pizzerias around the country?
“The decision is simple.”
Dan Puddle, who operates a pizza van based in a county in England comments: “The issue isn’t that stopped liking pizza – they just want higher quality at a fair price.”

He says his adaptable business can offer gourmet pizza at accessible prices, and that Pizza Hut faced challenges because it failed to adapt with changing preferences.

At an independent chain in a UK location, owner Jack Lander says the sector is broadening but Pizza Hut has failed to offer anything innovative.

“There are now individual slices, regional varieties, thin crust, artisan base, Neapolitan, deep-dish – it's a delightful challenge for a pizza enthusiast to try.”

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

Gradually, Pizza Hut's market has been sliced up and allocated to its more modern, agile competitors. To sustain its expensive staffing and restaurants, it would have to charge more – which commentators say is tough at a time when personal spending are decreasing.

The leadership of Pizza Hut's global operations said the rescue aimed “to ensure our guest experience and retain staff where possible”.

He said its immediate priority was to keep running at the open outlets and delivery sites and to assist staff through the change.

But with large sums going into running its restaurants, it likely can't afford to allocate significant resources in its delivery service because the market is “complex and partnering with existing delivery apps comes at a cost”, analysts say.

But, he adds, reducing expenses by withdrawing from crowded locations could be a good way to adapt.

John Hardin
John Hardin

A seasoned business consultant with over a decade of experience in startup mentoring and digital marketing strategies.