Pizza Hut used to be the ubiquitous All American pizza chain. The stores were everywhere, and the food was good enough to sit down and enjoy it. But now the chain has been losing money for seven straight quarters. Even the addition of Wing Street couldn’t salvage sales, and Ronn Torossian says now is the right time for the Hut
to take a long hard look at its current public image.
After all, pizza sure isn’t the issue. They may argue about who has the best, but Americans LOVE pizza. During the same period in which Pizza Hut, which is still America’s largest pizza chain, lost ground, both Papa John’s and Dominos have seen sales increase. That means the issue is one of perception guiding consumer choice. But why?
There may be no hard and fast answers to that question, but it’s one that Pizza Hut needs to answer now. Losing money for nearly two straight years is more than a fluke, it’s a trend. And it’s not a trend based on anything but consumer preference.
Some have said the issue is in changing trends. Pizza consumers are opting more for takeout than eating in. Picking up hot and ready at Little Caesars, or ordering online at primarily takeout chains. While that may be true, eat-in pizza joints are still doing fairly well. Even Cici’s, which caters to a price-conscious demographic, is maintaining against takeout. Besides, takeout pizza is nothing new.
So, could the answer be an image problem with pizza hut? Torossian believes that’s at least part of it. Sometime in the past decade or two, Pizza Hut made a shift toward a more fast food pizza quality but tried to keep the dine-in experience. That split the target demo … and frustrated both. Then, they doubled down with Wing Street, an interesting concept that had consumers wondering if Pizza Hut was trying to be a sports bar without the sports. Bottom line, America’s top pizza chain is suffering from an identity crisis. If they don’t figure out who they are, consumers will do it for them … by finding someplace else to eat.