For many families, Pizza Hut has been their go-to restaurant for decades.
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However, you may suddenly be looking around and wondering exactly when and why Pizza Hut went from being a national treasure to an expense people are becoming increasingly unwilling to shell out for.
There are some hard truths as to why it’s no longer the giant of takeout food that it once was.
Here are 10 reasons that you may not have realized Pizza Hut has become so expensive in recent years.
Why is Pizza Hut So Expensive? (Top 13 Reasons)
1. World’s Top Cheese User
It’s no secret that Pizza Hut uses a lot of cheese.
In fact, they are the world’s top user of it, with a reported 300 million pounds per year.
This translates to 3% of the cheese used throughout the entire world.
However, not everyone knows that Pizza Hut gets their cheese from an unidentified billionaire.
Based in Denver, Colorado, Leprino Foods supplies cheese to many pizza chains, Pizza Hut included.
Leprino Foods started their cheese empire the same year that Pizza Hut opened their first location, but it wasn’t until 1968 that the two companies came together.
At first, Leprino Foods was distributing cheese in five-pound blocks, but when they discovered that franchisees weren’t happy with this, they changed their methods.
The new way was to sell cheese not in blocks, but sliced and frozen.
However, this also caused problems for chains like Pizza Hut.
By 1972, the chain had 1,000 stores and needed to be able to make pizzas as quickly as possible.
By the 1990s, 90% of the cheese sold by Leprino Foods was bought by Pizza Hut.
However, the pizza chain wasn’t happy with the cheese they were receiving.
Pizza Hut felt that the pre-cut, frozen mozzarella took longer to defrost than they were comfortable with.
They were also unhappy that the slices of cheese would crumble when put on the pizzas.
In response to this, Leprino Foods’s in-house scientists determined that, by creating a mist to act as a preservative, they could add unique flavors to their cheese, like jalapeno and salted caramel.
However, this also gave them the ability to make cheese with less fat in it.
They accomplished this by creating a base using mozzarella and coating it with a mist of orange food coloring and the flavor of cheddar.
This wasn’t the only time Leprino Foods changed the way they made cheese in order to keep serving as Pizza Hut’s supplier.
Pizza Hut upgraded to using a conveyor oven that could reach higher temperatures than the ovens they had previously used.
To prevent their cheese from burning inside the new, hotter pizza ovens, Leprino Foods changed the formula they used to make their cheese.
2. Upgraded Select Locations
While in most locations, Pizza Hut only supports dine in and take out meals, some restaurants were upgraded to serve as an all-you-can-eat buffet offering not only pizza, but also desserts, salads, and breadsticks.
In both Virginia and Indiana, Pizza Hut upgraded some of their locations to Italian Bistros.
The Bistro locations offer fancier foods like toasted sandwiches, chicken Pomodoro, and even penne style pasta.
3. Dine-In Has Declined In Popularity
At the height of its success, Pizza Hut was primarily a dine-in pizza chain.
By 2019, Restaurant Business was reporting that 90% of Pizza Hut customers were opting for take-out over dine in.
The problem with this was that half of all Pizza Hut locations were staffed with hosts and servers, for whom there was no longer much of a demand.
Since then, Pizza Hut has closed many of their dine-in locations, hurting their bottom line significantly.
4. Competitors Outshining Them
When other pizza chains were offering discounts to their customers, Pizza Hut failed to do this.
A spokesperson for the company acknowledged that this was an area they needed to work on.
One reason for this is that Pizza Hut is a franchise, and many who bought into it were not willing to offer discounts in their stores.
In line with the prices Pizza Hut has been charging, their brand identity seems to be weaker than that of their competitors.
By not conveying a strong enough message to consumers, they weren’t making the impression they needed to be making.
As a result, consumers would often choose other pizza chains without even thinking of Pizza Hut.
5. Lawsuits
Pizza Hut has faced numerous lawsuits from many of their delivery drivers.
One such lawsuit was filed in 2016 and cost the company $3.1 million to settle out of court.
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To date, this was the largest settlement the company ever had to pay.
It came about in Florida, after the state’s many Pizza Hut delivery drivers filed a suit claiming that they were underpaid for every delivery they made.
One year later, Pizza Hut settled another lawsuit based on an incident that had happened in 2009.
At that time, a Pizza Hut delivery driver hit a motorcyclist with his car, resulting in a months-long hospital stay for the victim.
A year after that, Pizza Hut found itself facing yet another lawsuit, this time from a franchisee.
The drivers employed at 72 of Wisconsin’s Pizza Hut locations sued the company stating they never received reimbursement for the gas they needed to make their deliveries, along with related vehicle maintenance.
When the lawsuit was settled, Pizza Hut had to pay out $2 million.
That same year, a man in Kansas sued Pizza Hut after one of its drivers struck his mother and grandmother, killing his mother and leaving his grandmother gravely injured.
6. Trouble Connecting With Millennials
Millennials are some of the world’s top consumers of pizza.
In one year, millennials increased their investment in the pizza industry, increasing it from $38 billion to $45 billion.
Though Pizza Hut tried to connect with millennials, they were unable to succeed.
One way they tried to make the connection was to add to their menu a stuffed crust pizza with bacon and cheese in it, as well as a cookie dessert pizza.
This was followed by a 2014 marketing campaign called “Flavors of Now.”
With assistance from many food truck operators located in New York City, Pizza Hut developed new menu items and flavors they hoped to use to attract millennials.
Ideas that failed to hook this demographic included drizzles of balsamic and something they called Ginger Boom Boom Crusts.
This likely left consumers of all ages confused about what Pizza Hut wanted to offer them, resulting in a huge decline in business and, therefore, revenue.
The vast majority of people who eat Pizza Hut are students. Having grown up on technology, they have become extremely reliant on it.
However, Pizza Hut failed to roll out technology-based forms of communication in time.
While they did eventually launch both a rewards program and delivery tracker, by then, many pizza-eating Americans already preferred Pizza Hut’s competitors.
7. Overlooked Demographics
To some extent, Pizza Hut got so caught up in trying to connect with millennials that they failed to consider how this would affect the other demographics they intended to attract.
After “Flavors of Now” yielded disappointing results, longtime Pizza Hut patrons, as well as families, began turning to other pizza chains for their fix.
One year after the campaign’s flop, Pizza Hut announced they were going to change their marketing plan to encompass all the demographics they were trying to attract.
8. Spending Excessive Amounts Of Money
Pizza Hut has gone to great lengths to gain more consumers.
After Papa John’s was dropped, Pizza Hut paid an undisclosed amount to become the NFL’s new pizza sponsor.
Since then, they’ve spent money purchasing self-driving vehicles to make deliveries in lieu of using drivers.
However, they also purchased new DXP cars that were equipped with ovens, guaranteeing that delivery customers would always get a steaming hot pizza.
It isn’t just huge changes like these that they have invested in.
They also expanded their services in certain U.S. markets.
By 2019 they were offering the delivery of beer at 300 locations.
This was set to increase to 1,000 by the end of 2019.
It remains to be seen if this will increase their revenues or not.
If it doesn’t, their prices are likely to remain high.
This isn’t the only expansion Pizza Hut is making in their restaurants.
In London, a handful of locations now feature cocktail bars.
In 2016, Pizza Hut sponsored the Super Bowl.
To mark the event’s 50th anniversary, they created a handful of pizzas covered in gold.
Each person who won a gold pizza also won Pizza Hut Gold Cards worth $100 each.
9. A Franchisee Went Bankrupt
Pizza Hut’s largest franchisee, NPC, was forced to file bankruptcy after incurring a debt of almost $1 billion, which led to the closing of 300 locations.
Most of these restaurants were dine-in locations and were said to be underperforming.
Each restaurant is set to be either closed or sold to a new owner.
10. Covid-19 Took It’s Toll
With the emergence of COVID-19 in early 2020, many restaurants closed numerous locations, including Pizza Hut.
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By July of that year, all 17 West New York locations were closed permanently.
The company felt the effects all over the world.
In fact, due to accumulated debt, they made the decision to close all their UK locations in light of the COVID-19 lockdown.
Though almost all of them have reopened, the company is still feeling the loss in revenues.
There are talks that the UK market will be restructured, and the new plans leave delivery drivers out in the cold.
In addition, the company reached out to the UK government in the hopes of receiving desperately needed financial support.
11. They Went to Space And Climbed Mt. Kilimanjaro
Astronauts need to eat, too, and Pizza Hut wanted to be there for them.
In a publicity stunt that won’t soon be forgotten, at their own expense, they sent a pizza to the International Space Station (ISS), courtesy of the Russian Space Rocket.
Since travel to outer space doesn’t come cheap, the company shelled out more than $1 million to get this pizza delivered.
It stands to reason that they would need to charge higher prices in order to make that $1 million back as quickly as possible.
It’s worth noting that, after spending that much money to feed the astronaut, they took the chance that he might not enjoy the pizza they sent.
This is because being in outer space for an extended amount of time changes a person’s taste buds.
Something that tastes delicious on Earth may taste disgusting in space.
In Pizza Hut’s defense, they did put extra salt and other spices on the pizza they sent.
They also had the foresight to substitute pepperoni with salami.
The reason for this was simple.
Pepperoni would not survive the trip to space because it would grow mold before it got there.
This is not the case with salami.
Another interesting fact about this experience was that, while the Russian astronaut was offered the pizza, the U.S. crew was given strict orders not to eat any of it.
This is because NASA won’t allow any of their spacecraft to serve as an advertisement for any company or brand.
However, sending a pizza to space wasn’t enough for Pizza Hut.
In another attempt to market themselves, the pizza giant delivered to the Mt. Kilimanjaro summit, which required the delivery person to embark on a six-hour hike.
No doubt the cost of paying one delivery person for six hours’ worth of work they wouldn’t have performed otherwise was quite high.
12. They Offered A Package To People Proposing Marriage
In another attempt to garner extra publicity, Pizza Hut created a package they offered to anyone who was planning to propose marriage to their partner.
Each package had a value of $10,000 paid for by the company.
The contents of the package included not only an engagement ring, but also flowers, fireworks, and wedding-day videographers and photographers.
That’s not all it included, of course.
All packages also came with the $10 Pizza Hut Dinner Box.
Producing these packages cost the company money that there was no real guarantee they would make back.
As an extra incentive to get people to purchase this package, everyone who did was eligible to win a complimentary wedding on the grounds of Pizza Hut’s corporate headquarters.
While only 10 packages were ever released, there is no doubt they cost the company quite a bit of money.
13. Hong Kong Dinner/Movie Combo
Though it never happened in the United States, Pizza Hut locations in Hong Kong hoped to increase sales by creating a pizza box that served as a video projector.
It was called the Blockbuster Box and made its debut in 2015.
Blockbuster Boxes each included a specially designed table.
This kept the surface of the lid away from the pizza to avoid making a mess.
Inside the table was a lens that had its own designated holding spot on the side of the pizza box.
All users had to do was put a smartphone in the middle of the box.
A video they played on the smartphone would be projected onto a wall using the lens.
While this technology was designed to work with Netflix, Pizza Hut made sure each box had a QR code.
By scanning the code with their phone, users could download a movie to watch for free.
Pizza Hut customers could choose from the four offered boxes, each a different style.
One style unlocked action movies; one unlocked horror movies; one unlocked romantic comedies; and one unlocked science fiction.
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Source: https://t-tees.com
Category: WHY
