Pizza Hut, owned by Yum Brands (YUM), is making efforts to regain momentum following a dip in consumer demand. According to Yum Brands’ fourth-quarter earnings report for 2024, Pizza Hut experienced a 2% year-over-year decline in same-store sales in the U.S. during the quarter. Additionally, the pizza chain’s operating profit dropped by 4% compared to the same period in 2023.
These declines come despite Pizza Hut’s recent initiatives to attract more customers. In October 2023, the brand introduced its $7 Deal Lover’s Menu, offering customers the chance to select two or more items for just $7 each. In December, Pizza Hut also piloted a new restaurant design featuring guest-facing pizza-making stations, self-service kiosks, and a drive-thru menu called “Hut ‘N Go,” which offers pre-made food.
However, these efforts have not been enough to counteract a broader trend: consumers are cutting back on fast food due to rising prices and the ongoing pressures of inflation and higher living costs. A recent LendingTree survey revealed that 62% of consumers are eating less fast food because of higher prices, and 56% prefer cooking meals at home when seeking cheap and easy options.
Pizza Hut’s Strategy to Attract Customers: Bringing Back a Classic
In response to these challenges, Pizza Hut has decided to bring back a beloved menu item: the Cheesy Bites Pizza. This fan-favorite features “28 pull-apart, cheese-filled bites” replacing the traditional crust, according to the company’s press release. Along with the return of Cheesy Bites Pizza, Pizza Hut is also introducing The Ranch Lover’s Flight, a new set of dipping sauces including Chipotle Ranch, Ultimate Ranch, and Pepperoni Ranch.
The timing of this revival coincides with the NCAA college basketball tournament, March Madness, which runs until April 7. Rachel Antalek, Pizza Hut’s head of food innovation, said, “As we bring back Cheesy Bites Pizza, we wanted to elevate the dipping experience, making it the ultimate dip-and-dunk moment just in time for March Madness.”
Facing Increased Competition
Despite these promotional efforts, Pizza Hut faces stiff competition, especially from its rival Domino’s. In February, Yum Brands CEO David Gibbs noted during an earnings call that Pizza Hut’s U.S. sales remain under pressure due to increased competition in both the quick-service restaurant (QSR) industry and the pizza category. Gibbs emphasized that value-driven offerings, like the $7 Deal Lover’s Menu, have been successful in driving repeat visits from loyal customers, but attracting new, price-sensitive consumers requires further innovation.
Domino’s has been particularly aggressive in its marketing, launching its first-ever Parmesan Stuffed Crust pizza just before March Madness, directly challenging Pizza Hut’s Original Stuffed Crust pizza. In addition, Domino’s announced a limited-time offer of 50% off menu-priced pizzas for online orders between March 17-23 in celebration of the tournament.
As Pizza Hut seeks to regain its footing, its focus on value promotions, classic menu revivals, and innovative marketing strategies will be key in determining whether it can reverse its current sales slump and compete effectively in a crowded market.
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