Pizza Hut grows stale with American diners

Sales have fallen for seven straight quarters at the chain. 'We're obviously disappointed,' says the CEO of parent company Yum Brands.

By MSN Money Partner Aug 7, 2014 1:09PM
Credit: © Larry Downing/Reuters

Caption: A Pizza Hut logo is pictured outside its restaurantBy Venessa Wong, Businessweek

Pizza Hut, the country's largest pizza chain, seems to be losing favor with American diners. 

The 56-year-old pizza restaurant's same-store sales in the U.S. have fallen for seven consecutive quarters as competitors Domino's (DPZ) and Papa John's (PZZA) have seen sales increase.

"We're obviously disappointed with second-quarter results and particularly with the very poor performance in our U.S. business," David Novak, the chief executive of parent company Yum Brands (YUM), said of Pizza Hut during an earnings call in July. "We've had our ebbs and flows versus the competition over the years, and I can assure you we will be back," Novak told investors.

Pizza Hut remains the largest pizza chain in the U.S. by far, with more than 7,800 restaurants -- it continues to add more locations. But, says Darren Tristano, executive vice president at research firm Technomic, as quick-service competitors such as Papa John's, Domino's, and Little Caesars cut into Pizza Hut's U.S. business, new fast-casual, made-to-order pizza concepts are also expected to steal market share.

Pizza Hut's recent menu launches -- such as crazy cheesy crust pizza, three cheese stuffed crust pizza, and Blake Shelton-endorsed BBQ sauce pizza -- have failed to improve results.

The chain is focused heavily on China, where it is developing Pizza Hut as a more upscale casual dining restaurant rather than as a delivery and takeout joint. It now has 1,134 sit-down locations in China -- where sales are increasing -- and just 215 delivery shops. In the U.S., only 14 percent of Pizza Hut's business is dine-in.

Pizza Hut spokesman Doug Terfehr says China has not been a distraction. "Both our domestic and international businesses are incredibly important to the health of our brand," he said in an e-mail. "As we've matured around the world, we've developed dedicated resources to handle that growth without wavering on our commitments to our business here."

Terfehr cited recent efforts, such as a dessert partnership with Hershey (HSY) that kicked off with an 8-inch cookie, the addition of equipment to all Pizza Hut restaurants to serve Wing Street chicken, and updating its website and app this spring as major turnaround efforts.

Bigger changes are on the way. Novak told investors that Pizza Hut will "launch a number of major initiatives in the United States to reignite sales beginning in the fourth quarter," including plans to boost millennial-targeted advertising and digital marketing and a greater focus on value.

More from Businessweek

Aug 7, 2014 1:38PM
If they would quit cheaping out on the toppings then they might get some of their business back. the last time i ordered from them there were not enough topping to cover the pizza. I ordered a meat lovers with extra cheese.
Aug 7, 2014 1:47PM
Aug 7, 2014 1:51PM
Pizza Hut's quality has gone down hill in the last 18 months.  You are better off buying a frozen pizza from the grocery store. 
Aug 7, 2014 1:53PM
Biggest problem with Pizza Hut is that they are now skimpy on the toppings.  The pizza that gets delivered never looks like the one you order.... You never get the pizza that looks like the one that is advertised or shown.  They really have become skimpy on the toppings. 
Also anybody that has shopped for any dairy products lately knows that they have risen greatly.  The Pizza Hut pizzas have very little cheese on them compared to the way they came in the 70ies and through the 90ies!  It is a shame really how they have cut back.
One more thing we have seen is that when you order an advertised special, say a 3 toping pizza, if you order double cheese or double another topping as part of the three toppings they charge you more.  I do not get it.  If you order Sausage, bacon, and pepperoni you are fine.  But try to order Double sausage and mushroom and they up charge you.  Practices like that get old fast.
Aug 7, 2014 1:59PM
Try using real cheese again. These pizza companies just don't get it. The pizza sucks.
Aug 7, 2014 1:46PM
Remember when a frozen pizza , and a six pack was all you needed ?
Now, it's all we can afford .

Aug 7, 2014 1:53PM

Used to like pizza hut last time I got a pizza I had a coupon even with discount pizza was so bad I still felt cheated.

These corporate brainiacs are too out of touch with their customers to realize they make a terrible product,lately

frozen pizza is better than pizza hut.

Aug 7, 2014 1:50PM
Their pizza is terrible. They need to scrap whatever they're doing and start over
Aug 7, 2014 2:13PM

Pizza Hut runs specials and when you buy the specials you noticed that the toppings are so skimmpy that you wind up with flavored dough. I can get better at Litte Ceasars for half the cost. Gone are the days that pizza's were overloaded with goodies at a decent price. I remember when a small pizza was as big as today's large pizza. Things change and not always for the better I guess.

Aug 7, 2014 2:41PM
Nothing can ruin a business faster than putting the "bean counters" in charge.  When you sacrifice quality to save a few pennies, you are going to end up losing more than you save.
Aug 7, 2014 2:32PM
When i read these comments, whether about Pizza Hut, red Lobster, KFC or back when JC Penny was having so many problems I can't help but think that if the CEO's of these businesses would read the comments and act on them they could improve what they are doing. Especially when so many of the comments refer to the same complaints. I guess they aren't smart enough?
Aug 7, 2014 1:46PM
back in the mid/late 90s when Pepsi, and sales were down,  the highly intelligent, know everything executives decided that to revive the Brand, they woulod start skimping on ingredients, to what was  already one of the lousiest pizzas on the planet - these troglodytes just don't get it..........  
Aug 7, 2014 1:45PM
Yes…. Most of us like our pizza cooked…. 
Aug 7, 2014 1:38PM
I think I speak for us all, I'd like to see YUM brands die in a fire.  With all the grease/butter they put on their food it should be quite the show.  Down with Taco Bell, KFC and Pizza hut.  Their food is garbage, loved it as a kid, just can't eat it anymore without spending half the day on Shi++ing my guts out.
Aug 7, 2014 2:04PM
well, in chicago, there are so many better places to go than a "chain" for pizza. 
Aug 7, 2014 1:39PM
Simply put:  What they call pepperoni is anything but.
Aug 7, 2014 1:41PM
Maybe delivering farther than within sight of the restaurant would help.
Aug 7, 2014 1:56PM
They need to slow the ovens down a bit.  In the past you could get a well cooked pizza even a crispy thin but now the oven speeds are so fast you are lucky it's not a floppy NY by the time you dig in.  They could also do with some experimentation on their sauces.  The traditional pizza sauce has been in disfavor among young adults for some time now as they go to alternatives like Alfredo or pesto or BBQ.  They could also try bringing back some of the old favorites like the Taco pizza which is not available everywhere.  The loss of the salad bar is also a huge hit to many customers who visited because of that salad bar.
Aug 7, 2014 1:50PM
their pizza really sucks. had for the first time about 40 yrs. ago. thought i would give it another go when one moved in close to my house. guess what, after all these years they still don't know
how to make a good tasting pizza. dont know how they lasted this long
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