On 11 September, it was announced that Pizza Hut is to close 29 of its 244 UK restaurants, putting around 450 jobs at risk.
After the Eat Out to Help Out scheme ended, Pizza Hut introduced a host of offers intended to support sales. However, this came too late, and wasn’t enough for the chain to avoid store closures.
Pizza Hut has fallen victim to a combination of reduced footfall on the High Street, high rents in unprofitable restaurants, and a failure to adapt to a changing market.
Even before the coronavirus pandemic hit, with footfall in town centres having fallen by five per cent since 2015, casual dining operators have been desperately looking to renegotiate new terms with landlords, including turnover rent and rent holidays.
These, however, have been met with resistance from landlords and for struggling businesses with a number of premises, getting rid of large and expensive high street leases has become key to survival.
Food for thought
Exacerbated by lockdown, the rise of Deliveroo and similar operations has shaken up people’s eating experiences, with many more likely to order takeaways than dine out. While Eat Out to Help Out went some way to provide temporary respite for struggling restaurants, the end of that scheme means that many are now having to re-adjust their strategy for expensive high street rental portfolios.
What’s clear now is that a bricks and mortar presence is far less important to many retail and restaurant business models, and innovation is critical if businesses are to survive on the high street.
Pizza Hut is just the latest in what is already a lengthy list of high-profile post-COVID-19 casualties. In order to avoid the same fate, other businesses in the hospitality sector need to reassess priorities and processes, using this difficult time as a reason to evolve, in turn building future resilience.
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