Pizza Hut, owned by Yum Brands (YUM), has recently experienced a decline in consumer demand. According to Yum Brands’ fourth-quarter earnings report for 2024, Pizza Hut reported a 2% decrease in year-over-year same-store sales in the U.S. during the quarter, accompanied by a 4% reduction in operating profit compared to the same period in 2023.
The decline in sales follows several initiatives by Pizza Hut to attract budget-conscious customers. In October 2023, the company introduced its $7 Deal Lover’s Menu, which offers customers the option to select two or more items for $7 each. In December, Pizza Hut announced a pilot program for a new restaurant design featuring a guest-facing pizza-making station, self-service kiosks, and a drive-thru with a new “Hut ‘N Go” menu offering pre-made food.
Despite these efforts, it seems consumers continue to avoid fast food to cut costs amidst inflation and increased living expenses. A recent LendingTree survey found that 62% of respondents are eating less fast food due to rising prices, with 56% opting to prepare meals at home for affordability and convenience.
In an effort to attract more customers, Pizza Hut has reintroduced the Cheesy Bites Pizza—a menu item featuring 28 pull-apart, cheese-filled bites in place of a traditional crust—for a limited time. Additionally, the company is launching The Ranch Lover’s Flight, which includes three new dipping sauces: Chipotle Ranch, Ultimate Ranch, and Pepperoni Ranch. These promotions coincide with March Madness, the NCAA college basketball tournament concluding on April 7.
Rachel Antalek, head of food innovation at Pizza Hut, stated, “As we bring back Cheesy Bites Pizza, we wanted to take the dipping experience even further. 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.”
Yum Brands CEO David Gibbs emphasized during an earnings call in February that Pizza Hut will offer more deals to counter declining sales. “In the U.S., sales remained under pressure due to more value competition across both the QSR industry and the pizza category,” Gibbs noted. “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 faces heightened competition from Domino’s Pizza, a chief competitor. Just before March Madness, Domino’s introduced its first-ever Parmesan Stuffed Crust pizza, competing directly with Pizza Hut’s Original Stuffed Crust pizza. Furthermore, Domino’s offered a 50% discount on menu-priced pizzas ordered online during the week of March 17-23 in celebration of March Madness.
