Why the Public Turned Away from Its Taste for the Pizza Hut Chain

At one time, Pizza Hut was the top choice for families and friends to feast on its eat-as-much-as-you-like offering, unlimited salad bar, and ice cream with toppings.

However not as many diners are frequenting the restaurant currently, and it is closing half of its UK restaurants after being rescued from insolvency for the second instance this calendar year.

It was common to visit Pizza Hut when I was a child,” notes one London shopper. “It was a regular outing, you'd go on a Sunday – spend the whole day there.” However, at present, aged 24, she says “it's no longer popular.”

In the view of young customer Martina, the very elements Pizza Hut has been known and loved for since it launched in the UK in the mid-20th century are now not-so-hot.

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

Since grocery costs have risen sharply, Pizza Hut's unlimited dining format has become quite costly to run. As have its outlets, which are being reduced from 132 to a smaller figure.

The chain, like many others, has also experienced its operating costs go up. Earlier this year, staffing costs increased due to increases in the legal wage floor and an higher rate of employer national insurance contributions.

A couple in their thirties and twenties explain they frequently dined at Pizza Hut for a date “from time to time”, but now they order in Domino's and think Pizza Hut is “very overpriced”.

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

Even though Pizza Hut does offer pickup and delivery through external services, it is missing out to larger chains which solely cater to this market.

“The rival chain has taken over the delivery market thanks to intensive advertising and constantly running deals that make shoppers feel like they're getting a bargain, when in reality the original prices are relatively expensive,” notes the specialist.

But for the couple it is justified to get their evening together sent directly.

“We predominantly have meals at home now rather than we eat out,” explains the female customer, matching recent statistics that show a decline in people visiting 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, another rival to ordered-in pies: the frozen or fresh pizza.

A hospitality expert, senior partner at a major consultancy, explains that not only have retailers been selling good-standard ready-to-bake pizzas for a long time – some are even selling countertop ovens.

“Lifestyle changes are also having an impact in the performance of casual eateries,” comments Mr. Hawkley.

The growing trend of high protein diets has increased sales at poultry outlets, while reducing sales of dough-based meals, he continues.

As people go out to eat more rarely, they may look for a more premium experience, and Pizza Hut's classic look with vinyl benches and traditional décor can feel more old-fashioned than premium.

The “explosion of artisanal pizza places” over the last several years, for example boutique chains, has “completely altered the consumer view of what excellent pie is,” says 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 caused Pizza Hut's downfall,” she comments.
“What person would spend a high price on a tiny, mediocre, unsatisfying pizza from a chain when you can get a beautiful, masterfully-made traditional pie for under a tenner at one of the many authentic Italian pizzerias around the country?
“It's a no-brainer.”
An independent operator, who runs a pizza van based in a regional area says: “People haven’t fallen out of love with pizza – they just want improved value.”

He says his adaptable business can offer gourmet pizza at affordable costs, and that Pizza Hut had difficulty because it was unable to evolve with new customer habits.

From the perspective of an independent chain in a city in southwest England, the founder says the sector is expanding but Pizza Hut has failed to offer anything innovative.

“Currently available are individual slices, artisanal styles, thin crust, fermented dough, wood-fired, Detroit – it's a wonderful array for a pizza-loving consumer to discover.”

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

In recent years, Pizza Hut's share has been sliced up and allocated to its trendier, more nimble rivals. To maintain its expensive staffing and restaurants, it would have to charge more – which commentators say is tough at a time when household budgets are decreasing.

The leadership of Pizza Hut's overseas branches said the buyout aimed “to ensure our dining experience and save employment where possible”.

He said its immediate priority was to keep running at the open outlets and takeaway hubs and to help employees through the change.

However with so much money going into running its restaurants, it likely can't afford to invest too much in its off-premise division because the industry is “difficult and partnering with existing delivery apps comes at a price”, commentators say.

However, it's noted, reducing expenses by exiting crowded locations could be a good way to adjust.

Stephen Phillips
Stephen Phillips

A seasoned financial analyst with over a decade of experience in investment management and personal finance education.