The Decline of Pizza Hut...What Happened?

[Music] pizza hut is what i would consider an iconic american brand thinking back they're kind of like the perfect family restaurant honestly how many of you watching this have these great memories of eating there with your family maybe you had your birthday party there or maybe you participated in their book it reading program where you earned one of those colorful pins or my favorite a personal pan pizza it would sure take a lot to get that pizza but it was on another level i'm sure that many of us have similar memories involving pizza hut which is why it's upsetting to see them like this now to be clear i'm not saying that they're in any immediate danger of shutting down pizza hut is still pretty stable and i'm guessing that they are going to be with us for quite a while but i do have strong evidence to suggest that pizza hut has seen better days in 2019 they announced that they would be closing 500 of their 7 500 us locations over the next two years it's part of their long-term plan that involves closing underperforming restaurants and replacing them i'll touch more on it later but for the time being that is a significant downsizing in fact the president of the company along with other top executives have expressed that they haven't been happy with pizza hut's overall performance looking at their sales over the past few years they have actually been fairly consistent which may not seem like much of an issue but it is concerning see when we compare that to dominoes i think we start to see the problem when they say that no one outpizzas the huts i don't exactly know what that means but it might not be true anymore in the 1970s and even well into the 1980s anyone who was around at the time can tell you that pizza hut used to be the national pizza chain they were a national pizza chain before there were national pizza chains people had to make the choice of either going to the local regional place or to pizza hut any other popular chain that you can think of today was not a factor on a national scale until at least the 1980s then over those next few decades things got more competitive some of those smaller chains started closing the gap but pizza hut still remained on top that is until 2018 as we saw on the graph dominos took over that number one spot and over the next few years have only extended that lead that's meaningful after 47 years the world's number one pizza chain pizza hut has fallen to second place and a distant second at that in that same year 2018 actually asked the audience of this channel what is your favorite of the big four pizza chains and after 46 000 votes domino's was the clear winner over the second place pizza hut i believe further suggesting that people have moved away from them more evidence would be the fact that their biggest franchisor npc international filed for bankruptcy in july of 2020 they were the ones who operated about 20 percent of the u.s pizza hut locations of course there were some other factors involved in that one but it's not a good indicator of the state of the brand plus it later led to an additional 300 restaurant closings and then finally what about the logo change through most of their dominant years throughout the 70s 80s and 90s this was their logo then in 1999 they changed it they added more colors and slanted everything but then 20 years later in 2019 they went back to that old logo according to their chief brand officer at the time embracing our iconic pizza hut logo is recognition of a time period where pizza hut unequivocally reigns supreme because that's where the future is headed i take that to mean that the old logo represents a better time for pizza hud and that bringing it back will remind the customers of those better times i hope that we can at least agree that pizza hut has indeed seen better times they've lost a lot of control of their market and in this video i'm going to attempt to explain why the very first pizza hut opened in wichita kansas in 1958 and it could not have been more modest in the beginning it was two brothers named frank and dan carney they borrowed 600 from their mom and used it to buy used equipment and rent out a small building not too far from a university i thought it was interesting that they called their first restaurant pizza huts mostly because they obtained this sign that had only enough room for so many letters and you know of course they wanted to use the word pizza so that meant that their second word it can only be three letters they eventually settled on the word hut and that was the beginning of the brand if they had a bigger sign things may have gone much differently early on they valued quality pizza good service and believed in it so much that on their opening night they gave away their pizzas to try to attract a customer base it was an effective promotion the restaurant did well and after about a year they were able to convince a friend of theirs to operate the first franchise location in topeka kansas it's also worth mentioning that part of their marketing early on involved this i guess stereotypical mascot named pizza pete i believe that it was meant to double as a fun cartoon for the kids while promoting the italian authenticity of their food pizza itself wasn't nearly as well known or popular at the time so something like that was effective in drawing in customers and creating a fun environment they adopted that red roof logo started designing their restaurants in the same manner and continued franchising more and more locations across the united states and even into other countries like canada and germany and by 1971 pizza hut had over 1 000 locations making them the biggest chain of pizza restaurants in the world six years later when they had more than doubled to over 2 000 locations they were bought by pepsico and it was pepsi that was able to take them to an even higher level surpassing 5000 locations in less than a decade after the acquisition and surpassing 7 500 locations when they spun it off along with the rest of the restaurant division into its own company that was owned by the public if you want more details about their time with pepsi and what was happening with all of that i do recommend this other video that i made about pepsi but that new company that i was now a part of was initially called tricon global restaurants but soon renamed to yum brands which is how they exist today right now it consists mainly of kfc at pizza hut and taco bell though some people have expressed the opinion that pizza hut has been the one holding them back and should be divested now when looking at the reasons behind the trouble happening at pizza huts i think most of it can be explained by two main issues the first one being a lack of catchy menu items and i realize that this might sound so trivial when you first hear it but let me explain today seemingly every fast food restaurant has a never ending sequence of new items that are pumpkin flavored or cheeto flavored or whatever but pizza hut was somewhat of a pioneer at this to a point where i would even say that these catchy innovative menu items were once a major part of their success a couple of examples of what i would consider to be more gimmicky ones would be the edge which happens way closer to the edge of the pizza than they should be or the big new yorker both introduced in the late 1990s they sold pretty well and kept people coming back to pizza hut but then there's other examples of new menu items that they introduced that i would truly call innovative some examples there would be in 1980 when they came out with the pan pizza or in 1995 when they came out with the stuffed crust pizza famously promoted by donald trump there are countless examples to show how pizza hut once had one of the most creative menus out there which unfortunately may not be the case anymore in late 2014 you may be surprised to hear this but pizza hut announced an all-new menu they called it flavor of now and described it as their biggest brand evolution ever i mean this was meant to be a big deal they had new ingredients new sauces new crust flavors new drizzles just a bold attempt to completely revamp their entire menu to make it appear fresh and more upper scale and to go along with that new menu they updated their website the boxes the uniforms the logo i think that the goal of this was to shift their customer base away from families and more specifically toward millennials i'm gonna go ahead and guess that most of you barely remember this happening or maybe not at all because the whole flavor of now attempt was pretty much a failure as we've already seen it did nothing at all to help their sales if anything they actually went down a tiny bit the following year the ceo of yum brands confirmed that the results were disappointing and as far as i could tell it's mostly been abandoned if anything it probably just alienated their existing customers more than anything else overall this suggests to me that pizza hut is not quite what they used to be in introducing new menu items that appeal to their customers i'm just saying that the bigfoot pizza was a little more successful than the cockadoodle bacon that's a weird sentence the second part of their troubles i believe it can be attributed to being slow to delivery and i don't mean taking over 30 minutes to deliver a pizza so then it's too cold i mean taking too long to make pizza delivery in general a major part of their business here's what i mean historically pizza is like the most common thing to have delivered right i mean now more than ever but it's been happening for a while before 2020 before online shopping before any of it people were having pizzas delivered however pizza hut was once famous for their family friendly sit-down restaurants in the beginning of this video when you were thinking back to those memories of birthday parties and personal pan pizzas which is another pizza hut innovation by the way they took place inside of a pizza hut not at home eating pizza delivered by pizza huts it was like an event it was an outing it was not just about the food in fact they didn't even offer pizza delivery at a large scale until 1986 and the only reason they did it then was because domino's had been so successful with it you might even say that pizza hut's lack of delivery during those times is a big reason that domino's was even able to get their foot in the door in the first place i do have to say that after a late start they have been aggressive with it but i think the issue is that it's such a fundamental change as far as the public's perception they've had all of these crazy marketing attempts to try to make people associate pizza hut with delivery in 1989 they famously delivered pizza to the white house in 2001 they delivered it into outer space in 2016 they delivered it onto mount kilimanjaro when they closed those 500 locations the reason for it was to eliminate the dining area and to reopen them as smaller buildings their fastest growing store models are the smaller ones that they call delco short for delivery and carryout and part of their reasoning is that if every time you see a pizza hut it's a little tiny building you're going to reconfigure your mind and associate them with delivery so to summarize all of this a pizza hut is a very different place than it used to be they've been around for long enough to have the world change around them parts of what made them popular before are no longer relevant and they've been forced to adapt to those changes whereas some of their competitors like domino's or little caesars first grew in that new environment if that makes any sense it's kind of like pizza hut is the older generation struggling to fit in with the new one some of their attempts to do it do seem to be a little slow or potentially misguided but they are attempts they know where they need to go they just don't know exactly how to get there which gives me confidence that they will eventually make progress in the right direction let me know in the comments what do you think about pizza huts how have they changed over the years and how has your perception of them changed do you even like their pizzas or do you prefer one of their competitors i do want to re-ask that poll from 2018 to see if we get different results so be sure to check the community tab of this channel if you want to weigh in on it or check the results that should be fun and any other thoughts you have about pizza hut or any other part of the pizza industry leave them in the comments i'd like to hear what you have to say thank you for watching [Music] you

Channel: Company Man

Views: 3,910,053

Keywords: Pizza, Pizza Hut, Domino's, Little Caesars, Business, Company Decline

Id: Jobb8zW---c

Length: 11min 15sec (675 seconds)

Published: Wed Dec 22 2021

Reddit Comments

[u/password_is_burrito]

Also, their pizzas aren’t as sinfully delicious as they were 30-40 years ago. I’m looking at you, pan pizza.

Also, they had the Priazzo.

And those sandwiches…. Omg.

[u/donvara7]

Everytime I've looked at getting a Hut pizza last few years even the deals are expensive. Although years ago I did noticed the pan pizzas seem to have more consistency than in 2000-2010ish. It was a coin flip if the bottom would be crispy or soft back then. (Could be local though)

Some stuff in this article

Instead of focusing in higher quality, the company will focus on convenience.

CEO Greg Creed "the days of trying to compete with a better product are gone"

He compared his goals for the chain to those of the on-demand car service app Uber, saying "easy beats better."

My opinion is they might've had a better shot going the opposite direction. Quality with dine in slowness. It was an experience back then, something that still to this day resonates with those who remember. They had that going for them and don't seem to recognize it. Convenience is everywhere now, Little Caesars has convenience and price. Dominos has price plus a little quality, Pizza Hut... Idk. They could've stood out with dine-in but I can't say that would've been the best business decision. I kinda doubt the board room is filled with people who grew up middle class enough to recognize the niche market for that, and then add the convenience in addition to it.

I could ramble on.

[u/FaBiOtHeGrEaTeSt]

IMO I think Pizza Hut went downhill once they stopped giving out PS1 demos when you bought a pizza.

[u/john510runner]

Love this guy's videos.

Other great videos from this guy... Southwest Airlines, Costco, Dunkin Donuts, Carl's Jr/Hardee's, etc.

[u/Pickerington]

They went downhill when they stopped with having an all you could eat pizza and salad bar. I’m from the Midwest and I can tell for certain nearly 100% of the people I know stopped going or ordering all together when the all you could eat stopped. They also changed the dough a couple of times and it has just gotten worse. If I can avoid getting Pizza Hut I will. They are now the worse chain.

I would go now for Little Caesars then Donatos and then maybe Papa Johns or Dominoes followed last by Pizza Hut. Little Caesar’s was dead last in the 90’s and they have really stepped up their game. Are any of them the best pizza. Hell no. But are they convenient? Yes.

[u/muskoka83]

I’m not too good for the Hut.

[u/Mensae6]

It's funny that he brought up the 2014 rebranding and how "no one noticed". I fucking noticed. I was ALL OVER IT. It was actually a pretty neat pivot; they added tons of new ingredients, sauces, and crust types. You could suddenly get a Pizza Hut pizza with pretzel crust or spicy red pepper crust or toasted asiago crust. I always liked the variety of new sauces, even if I generally just ended up sticking to the plain. They added meatballs as a topping option, which I loved. Overall, this was a very exciting time for us Hut lovers, as it seemed like a new era had dawned and was full of possibilities.

Unfortunately, this was also around the time that I first noticed a significant decline in the overall quality of the food. With the rebranding clearly came some changes in recipes, few for the better. I swear to you the sauce changed. It became sweeter and a little less rich. I swear to you the pan pizza dough also changed, going from crispy-yet-fluffy to just plain greasy and soggy. For a myriad of possible reasons - cutting corners, market testing, new suppliers, hell even agricultural changes - the Pizza Hut we eat today is fundamentally VERY different from the Pizza Hut we ate in the 90's.

The real catalyst for this 2014 rebranding was, in my opinion, the Great Recession of '08. It was around this time that Domino's brilliantly rebranded and started their iconic 5-5-5 deal, where you could get three medium pizzas for $5 each. This was also the era of the $5 footlong at Subway and the Dollar Menu at McDonald's. The global recession meant people were scrapped for excess money, and suddenly a huge emphasis was on the value of food.

This didn't bode well for a higher-end chain like Pizza Hut. You can laugh this all you want, but Pizza Hut used to be quite respectable in terms of overall quality. In fact, it was Domino's that got the bad rep for being cheap and "like cardboard". Pizza Hut was a place you used to dine-in to as a family. Every location used to have full-time staff who's sole job was preparing the fresh dough every morning. The recession axed this position, and the crust went from hand-made every day to frozen literally overnight. Pizza Hut was forced to become a value based brand, and implemented their own version of the 5-5-5 deal shortly thereafter.

Domino's came out on top because their pizza was literally designed to be "cheap but good". They completely scrapped their old recipe, and worked on an entirely brand-new pizza that was both affordable and appetizing. Pizza Hut's problem is that they still tried to maintain their old recipe of yore, but were forced to make changes in order to compete financially. The result is a bastardization of a previously great pizza.

Pizza Hut's problem today is that they still can't decide if they want to be this higher-end, sit-down family restaurant or a cheap, quick, value-based delivery joint. The video suggests that they're pivoting towards the latter, but the overall vibe of Pizza Hut begs to differ. Barring local carryout specials, the Hut's latest value-based stunt is the "$10 Tastemaker" - a large three topping pizza for, as suggested, $10. Contrast this with Domino's, which offers a $7.99 large three topping pizza. Domino's might be kinda sus, but eight dollars is eight dollars. For whatever reason, it feels like the double-digit price range Pizza Hut has locked themselves into deals too steep.

Pizza Hut is sort of in this no man's land where if you wanna go cheap, you're probably getting Domino's, and if you wanna eat well, you're probably going local. I almost feel like Pizza Hut would benefit from raising their prices again for the benefit of improved ingredients. I would GLADLY pay $12 for the same pizza I ate in the 90's. And I imagine a lot of other people would, too. But as it stands, the Hut is simply having an identity crisis. Either double down on value and become affordable, or truly improve your pizzas and make them worth our while.

[u/AbandonedPizzaHut]

We'll be back

[u/nerd44]

Remember the full price then $5 $5 $5 ads from the 90s?