Pizza Hut, once synonymous with "family dining out," is on the brink in Britain. The operator has entered administration, and more than half of its local restaurants are expected to shut at once.
According to the Guardian in Britain on the 26th (local time), DC London Pie, the operator of the Pizza Hut franchise in Britain, went into administration on the 20th. Yum! Brands, which owns the Pizza Hut brand, immediately moved to manage the brand. Yum! Brands is a global dining corporations that also owns KFC and Taco Bell. On the 26th, they acquired the remaining business through a pre-pack administration process. Pre-pack administration is a method in which, just before bankruptcy, only high-quality asset with going-concern value are quickly sold off while distressed assets are wound down.
With this step, 68 Pizza Hut dine-in restaurant locations and 11 delivery-only outlets in Britain will permanently close. After the closures, the number of Pizza Hut locations in Britain will fall to 64, less than half. It will also be hard to avoid layoffs affecting more than 1,200 people.
The BBC noted that Pizza Hut's signature "bottomless refills" model sent related expense soaring, and the franchise headquarters ultimately could not overcome it. According to the Office for National Statistics (ONS), dining-out costs in Britain rose about 4.8% over the past year. To make matters worse, Britain's minimum wage rose by nearly 7% as of April 2024. In this high-cost structure, Pizza Hut's hallmark pile-it-high, sell-it-cheap model—such as the "unlimited salad bar" and "all-you-can-eat buffet"—became difficult to keep profitable. Citing accounting firm KPMG, the BBC said, "It is difficult to raise dining-out costs when household budgets are shrinking," pointing to Pizza Hut's predicament.
At the same time as prices climbed, fiercer competition in the dining-out market also cornered Pizza Hut in Britain. In the delivery market, Domino's Pizza and Papa John's dominate. Food expert Julia Crouch said in a BBC interview, "Domino's succeeded in making consumers feel they are getting a 'bargain deal' through aggressive marketing and constant discounts."
By contrast, the dine-in restaurant market has become a completely different world. Restaurant Online, a British dining trade outlet, assessed that a "pizza revolution" has unfolded in Britain over the past 10 years. The market has been led by authentic Neapolitan-style pizza specialists such as Franco Manca, Pizza Pilgrims, and Rudy's. The Spectator, a British current affairs weekly, said, "Pizza Hut was too expensive for consumers who prefer Domino's, and it lacked a middle-class image."
Pizza Hut also failed to keep up with consumer tastes. As Neapolitan pizza and the like gained popularity in the British market, Britain once saw an explosion of higher-priced pizza specialists with guaranteed quality. Restaurant Online, a restaurant trade outlet, said, "More consumers want products that are light, fresh, and easy to digest, not the old-style pizzas that are greasy, heavy, and overloaded with toppings," adding, "Public perceptions of what makes a good pizza have fundamentally changed."
Brand identity also held it back. The diagnosis is that it is hard to survive in the dining industry on nostalgia items like "unlimited ice cream" alone. Another weakness cited was that most locations sit in less accessible "out-of-town retail parks."
Yum! Brands must decide whether to tap into nostalgia with the remaining 64 British locations to win back family customers, or to chase the latest trends with massive investment to target "young, discerning" consumers. Experts noted, "Pizza Hut is also shifting strategy in the U.S. mainland toward 'Delco,' that is, delivery-and-carryout-only stores," adding, "Whichever route it chooses, it will require heavy investment across restaurant design, menu changes, and overall marketing messaging."