Why Pizza Hut Is Failing?

According to MarketWatch, part of Pizza Hut’s problem is that students are preferring to get their pizza from Papa John’s and Domino’s, and market analysts say their recent efforts to wade deeper into the technological world is only addressing part of the problem.

In 2017, Domino’s overtook Pizza Hut as the largest pizza chain by global sales. In July 2020, Pizza Hut’s largest U.S. franchisee, NPC International, filed for Chapter 11 bankruptcy protection after struggling under the burden of $1 billion in debt.

When the closures stop and Pizza Hut stores start to reopen, they’re going to look very different. Their Express store format is already out there, and if you’re wondering what your neighborhood Pizza Hut is going to look like, think of a quick-serve counter and a shop like the one that’s already at the Miami International Airport .

While USA Today says Domino’s has spent years playing with tech — even testing driverless delivery vehicles and perfecting their pizza tracker — Pizza Hut has been lagging behind in a big way.

Is Pizza Hut going bankrupt?

In July 2020, Pizza Hut’s largest U.S. franchisee, NPC International, filed for Chapter 11 bankruptcy protection after struggling under the burden of $1 billion in debt. Pizza Hut, a unit of Yum Brands, remains locked in a fierce battle with rivals Domino’s, Little Caesars and Papa John’s, which are offering new products and a range …

In 2017, Domino’s overtook Pizza Hut as the largest pizza chain by global sales.

What is the problem with Pizza Hut?

According to MarketWatch, part of Pizza Hut’s problem is that students are preferring to get their pizza from Papa John’s and Domino’s, and market analysts say their recent efforts to wade deeper into the technological world is only addressing part of the problem.

Then, in 2017, Pizza Hut paid $9 million to settle a lawsuit brought after a 2009 accident where one of their delivery drivers hit and seriously injured a motorcyclist, who spent months in the hospital (via the Las Vegas Review-Journal ).

According to Restaurant Business, only about 10 percent of Pizza Hut’s sales come from dine-in customers. At the same time, about half their locations were paying a wait staff and supplying dine-in facilities. It doesn’t take a business major to know that just doesn’t add up.

At the time, that was split between the 70,000-odd pizzerias in the U.S., with the big four (Pizza Hut, Domino’s, Papa John’s, and Little Caesars) taking in around $23.5 billion in 2015.

Pizza Hut hasn’t kept up with rival discount programs. In 2018, CNN took a look at just how Domino’s had risen to the top of the pile of national pizza chains, and they said they did it with a combination of creative marketing, tech innovations, and an overhaul to their menu and recipes.

If Domino’s is the young, hip, tech-savvy pizza chain, then Pizza Hut is the grandmother. You love the old dear, but if she calls one more time because she can’t figure out where the internet button went, you’re going to go smash that computer for the good of everyone involved.

Pizza Hut might be shifting their dine-in image to one that’s more focused on delivery and carryout, but in recent years, their delivery drivers have had them paying out millions. In 2016, Top Class Actions reported that they agreed to settle a lawsuit for $3.1 million. The suit was monumental; at the time, it resulted in the highest per-person payout of any delivery driver related settlement, and it all started because Florida drivers took them to court for being constantly underpaid.