How the Country Lost Interest in Its Appetite for the Pizza Hut Chain

Once, the popular pizza chain was the top choice for parents and children to feast on its unlimited dining experience, endless salad selection, and self-serve ice-cream.

But fewer customers are choosing the restaurant currently, and it is reducing 50% of its British restaurants after being acquired following financial trouble for the second occasion this year.

“We used to go Pizza Hut when I was a child,” says Prudence. “It was like a family thing, you'd go on a Sunday – make a day of it.” But now, aged 24, she says “it's fallen out of favor.”

For young customer Martina, certain features Pizza Hut has been famous for since it opened in the UK in the 1970s are now outdated.

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

Since ingredient expenses have soared, Pizza Hut's all-you-can-eat model has become very expensive to maintain. The same goes for its outlets, which are being sliced from 132 to 64.

The company, similar to other firms, has also seen its expenses increase. In April this year, labor expenses increased due to increases in the legal wage floor and an increase in employer social security payments.

Two diners say they would often visit at Pizza Hut for a date “every now and then”, 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 a food expert.

While Pizza Hut provides off-premise options through delivery platforms, it is falling behind to big rivals which focus exclusively to off-premise dining.

“The rival chain has succeeded in leading the off-premise pizza industry thanks to aggressive marketing and frequent offers that make consumers feel like they're getting a bargain, when in reality the base costs are relatively expensive,” explains the analyst.

However for the couple it is acceptable to get their date night delivered to their door.

“We definitely eat at home now rather than we eat out,” says one of the diners, echoing latest data that show a drop in people going to casual and fast-food restaurants.

Over the summer, quick-service eateries saw a six percent decline in customers compared to last summer.

Additionally, another rival to restaurant and takeaway pizzas: the supermarket pizza.

A hospitality expert, senior partner at a major consultancy, points out that not only have retailers been selling good-standard prepared pies for quite a while – some are even offering home-pizza ovens.

“Lifestyle changes are also contributing in the popularity of fast-food chains,” says the analyst.

The growing trend of high protein diets has driven sales at chicken shops, while hitting sales of carb-heavy pizza, he continues.

Since people go out to eat more rarely, they may seek out a more high-quality meal, and Pizza Hut's classic look with booth seating and red and white checked plastic table cloths can feel more old-fashioned than upmarket.

The rise of premium pizza outlets” over the last decade and a half, for example new entrants, has “fundamentally changed the public's perception of what quality pizza is,” notes the industry commentator.

“A light, fresh, easy-to-digest product with a few choice toppings, not the overly oily, dense and piled-high pizzas of the past. This, in my view, is what's led to Pizza Hut's decline,” she says.
“Who would choose to spend a high price on a small, substandard, disappointing pizza from a chain when you can get a beautiful, masterfully-made Margherita for less than ten pounds at one of the many traditional pizzerias around the country?
“It's a no-brainer.”
A mobile pizza vendor, who owns Smokey Deez based in a county in England says: “People haven’t stopped liking pizza – they just want better pizza for their money.”

The owner says his mobile setup can offer premium pizza at accessible prices, and that Pizza Hut faced challenges because it failed to adapt with changing preferences.

According to an independent chain in Bristol, the founder says the sector is diversifying but Pizza Hut has failed to offer anything innovative.

“There are now slice concepts, artisanal styles, thin crust, artisan base, traditional Italian, rectangular – it's a wonderful array for a pizza enthusiast to discover.”

He says Pizza Hut “should transform” as newer generations don't have any sense of nostalgia or loyalty to the chain.

Over time, Pizza Hut's share has been sliced up and distributed to its fresher, faster competitors. To sustain its expensive staffing and restaurants, it would have to increase costs – which experts say is tough at a time when household budgets are decreasing.

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

He said its key goal was to maintain service at the remaining 64 restaurants and delivery sites and to assist staff through the restructure.

But with so much money going into maintaining its outlets, it may be unable to allocate significant resources in its takeaway operation because the sector is “complicated and partnering with existing delivery apps comes at a price”, experts say.

However, it's noted, reducing expenses by exiting crowded locations could be a smart move to adapt.

Melissa Wright
Melissa Wright

Financial analyst and credit card expert with over a decade of experience in personal finance and consumer advocacy.