Guides & Advice

Pizza Hut restaurant closures: grabbing a slice of survival

Published: 11th September 2020
Area: Litigation & Dispute Resolution

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.

Challenging times

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.

We’re here to help

Our webinar on ‘Preserving your business and avoiding insolvency’ focuses on 5 key steps you can take to help your business withstand the effects of the COVID-19 crisis.

If you’re experiencing financial difficulties and would like some help and advice on how to protect your business, our corporate, restructuring and insolvency team can help – contact Sean Moran for guidance and support.

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