Why the Public Lost Interest in Its Appetite for Pizza Hut

At one time, the popular pizza chain was the favorite for families and friends to indulge in its all-you-can-eat buffet, help-yourself greens station, and ice cream with toppings.

Yet a declining number of diners are visiting the brand currently, and it is shutting down 50% of its UK restaurants after being bought out of administration for the second time this year.

It was common to visit Pizza Hut when I was a child,” explains one London shopper. “It was like a family thing, you'd go on a Sunday – turn it into an event.” However, at present, in her mid-twenties, she says “it's fallen out of favor.”

According to young customer Martina, the very elements Pizza Hut has been known and loved for since it started in the UK in the seventies are now less appealing.

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

Because ingredient expenses have soared, Pizza Hut's unlimited dining format has become increasingly pricey to run. The same goes for its outlets, which are being cut from over 130 to a smaller figure.

The business, in common with competitors, has also seen its costs rise. Earlier this year, staffing costs increased due to increases in the legal wage floor and an higher rate of employer taxes.

A couple in their thirties and twenties explain they used to go at Pizza Hut for a date “occasionally”, but now they order in a rival chain and think Pizza Hut is “too expensive”.

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

Even though Pizza Hut does offer off-premise options through external services, it is losing out to larger chains which solely cater to the delivery sector.

“The rival chain has managed to dominate the delivery market thanks to strong promotions and constantly running deals that make consumers feel like they're saving money, when in reality the standard rates are on the higher side,” says the expert.

Yet for the couple it is worth it to get their special meal delivered to their door.

“We definitely eat at home now instead of we eat out,” explains Joanne, matching current figures that show a decrease in people frequenting informal dining spots.

During the summer months, casual and fast-food restaurants saw a six percent decline in diners compared to last summer.

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

A hospitality expert, global lead for leisure at an advisory group, explains that not only have retailers been providing high-quality oven-ready pizzas for years – some are even selling countertop ovens.

“Evolving preferences are also contributing in the performance of fast-food chains,” says the expert.

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

Because people dine out not as often, they may look for a more upscale outing, and Pizza Hut's classic look with comfortable booths and nostalgic table settings can feel more dated than premium.

The rise of premium pizza outlets” over the last decade and a half, for example boutique chains, has “dramatically shifted the consumer view of what excellent pie is,” explains the food expert.

“A thin, flavorful, gentle crust with a carefully curated additions, not the massively greasy, heavy and overloaded pizzas of the past. That, arguably, is what's caused Pizza Hut's struggles,” she comments.
“Why would anyone spend nearly eighteen pounds on a modest, low-quality, underwhelming pizza from a large brand when you can get a stunning, expertly crafted Margherita for under a tenner at one of the many traditional pizzerias around the country?
“The decision is simple.”
An independent operator, who runs Smokey Deez based in Suffolk explains: “It's not that stopped liking pizza – they just want higher quality at a fair price.”

Dan says his adaptable business can offer gourmet pizza at affordable costs, and that Pizza Hut struggled because it could not keep up with changing preferences.

At an independent chain in a UK location, the founder says the sector is diversifying but Pizza Hut has not provided anything fresh.

“You now have by-the-slice options, artisanal styles, new haven, sourdough, traditional Italian, deep-dish – it's a wonderful array for a pizza enthusiast to try.”

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

Over time, Pizza Hut's customer base has been divided and allocated to its more modern, agile rivals. To keep up its high labor and location costs, it would have to increase costs – which industry analysts say is tough at a time when household budgets are decreasing.

The managing director of Pizza Hut's overseas branches said the rescue aimed “to safeguard our customer service and save employment where possible”.

The executive stated its first focus was to maintain service at the open outlets and takeaway hubs and to help employees through the transition.

However with so much money going into running its restaurants, it likely can't afford to allocate significant resources in its delivery service because the industry is “complicated and working with existing third-party platforms comes at a cost”, experts say.

Still, experts suggest, lowering overhead by withdrawing from oversaturated towns and city centres could be a good way to adjust.

Patricia Fletcher
Patricia Fletcher

A seasoned brewer and beer enthusiast with over a decade of experience in crafting unique ales and lagers.