Why Pizza Hut Fell Behind In The Pizza Wars?
Americans love pizza whether it’s at their favorite restaurant or at the kitchen table. Each week about 100 million Americans take a bite out of their favorite pie. From Maine to southern California there are about 95 000 pizzerias scattered across the US. This includes various brands like Dominos, Pizza Hut, Papa Johns, Little Caesars, and a few more.
Amongst all these, until the year 2017 Pizza Hut was the leading one. For more than 50 years one of the major US chains that consumers turn to for their pepperoni fix is Pizza Hut! The red roof restaurant, known for its stuffed crust and its pizza buffets, has more than 16k restaurants in over 100 countries. They even put a pie into outer space!!
But recent analysis shows that the 60-year-old brand is struggling to live up to expectations. In 2017 Dominos overtook Pizza Hut as the largest pizza chain by global sales. And, as of July 2020, Pizza Hut’s largest US franchisee filed for chapter 11 bankruptcy. This led to a negative image of the brand in many people’s view. The effect of this was seen even in the stock market, obviously.
So, from leading the pack to filing for bankruptcy, Pizza Hut has been through almost everything. But, why did this happen? What are the main reasons for Pizza Hut’s decline in sales? Let’s explore.
Pizza Hut got its start in Wichita, Kansas in 1958. Dan and Frank Carney, brothers, who were studying together at Wichita State University borrowed $600 from their mother and decided to try their hand at a popular new food item – Pizza. And, because the sign out front only had room for eight letters they came up with a name – Pizza Hut.
By the early 1970s, this was the number one pizza chain in the world. In 1972, the company opened its 1000th store listed on the New York Stock Exchange. By 1986, the number became 5000!!
When they were at their best and when their brand popularity was growing exponentially, it was all about experimentation. It was all about making pizzas that couldn’t get anywhere else. Keeping home delivery in mind, a special pizza with thicker dough that could retain heat for a longer period was made. Despite all the innovation Pizza Hut’s share of the market has been falling since the 90s.
As pizza became more of a household name, Pizza Hut had more and more national competitors. Also, along with competitors one main reason for this was home takeouts. Since the early 2000s, the greater percentage had shifted to home dining. Thus, the amount of time for the food to be delivered now decided whether customers would stick with a particular restaurant. And, when it came to delivery Dominos was the leading one. Thus, as the consumers shifted to mobile ordering and delivery Pizza Hut, known historically for its dining restaurants, saw its sales slide.
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