Pizza Hut, which Yum Brands (YUM) owns, recently suffered from a weakening in consumer demand.
Yum Brands’ fourth-quarter earnings report for 2024 reveals Pizza Hut saw a 2% year-over-year decline in same-store sales in the U.S. during the quarter. The pizza chain’s operating profit also shrunk by 4%, compared to the same time period in 2023.
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The decrease in sales comes after Pizza Hut recently launched several efforts to win back frugal customers. In October 2023, it unveiled its $7 Deal Lover’s Menu, which allows customers to choose two or more items “for just $7 each.”
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In December last year, Pizza Hut also announced that it was piloting a new restaurant design that features “a guest-facing pizza making station,” self-service kiosks, and a drive-thru with a new “Hut ‘N Go” menu that sells pre-made food.
Despite recent efforts, it appears that consumers are continuing to shun fast-food restaurants to save money as they battle inflation and higher costs of living.
According to a recent survey from LendingTree, 62% of consumers said that they’re eating less fast food due to rising prices, and 56% said that they choose to make food at home when they want an easy and cheap meal.
Pizza Hut announces return of classic menu item
Amid this concerning consumer trend, Pizza Hut has decided to resurrect a fan-favorite menu item from the dead to attract more customers.
The pizza chain is adding back Cheesy Bites Pizza to its menu for a limited time. Cheesy Bites Pizza features “28 pull-apart, cheese-filled bites in place of a traditional crust,” according to a recent press release.
Pizza Hut store in Shreveport, Louisiana on June 29, 2018.
Shannon O’Hara/Getty Images
In addition, Pizza Hut is introducing The Ranch Lover’s Flight, which includes three new exclusive dipping sauces: Chipotle Ranch, Ultimate Ranch, and Pepperoni Ranch.
The move from Pizza Hut comes in the middle of March Madness, the NCAA college basketball tournament that concludes on April 7.
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“As we bring back Cheesy Bites Pizza, we wanted to take the dipping experience even further,” said Rachel Antalek, head of food innovation at Pizza Hut. “The Ranch Lover’s Flight gives customers three unique ways to enjoy their pizza, making this the ultimate dip-and-dunk experience just in time for March Madness.”
Pizza Hut faces a major threat
During an earnings call in February, Yum Brands CEO David Gibbs said that Pizza Hut will be offering customers more deals to reverse declining sales.
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“In the U.S., sales remained under pressure due to more value competition across both the QSR industry and the pizza category,” said Gibbs. “We’ve seen that everyday value offerings such as the $7 deal lovers, effectively drive repeat visits from existing consumers. However, to attract lighter lapsed consumers, we must lean further into disruptive and distinctive value promotions.”
Pizza Hut has recently faced increased competition from Domino’s Pizza, one of its main rivals. Just days before March Madness kicked off, Domino’s launched its Parmesan Stuffed Crust pizza (its first-ever stuffed crust pizza), directly competing with Pizza Hut’s Original Stuffed Crust pizza.
Domino’s also recently announced that it is offering customers who order menu-priced pizzas online 50% off their order between March 17-23 in honor of March Madness.
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