Pizza Hut UK & Europe has seen continued growth in its delivery sales, with its aggregator channels growing particularly strongly, chief financial officer Kate Vacovec tells MCA.
While the brand will continue to “protect and sustain” its dine-in channel – which has seen a bounceback post-pandemic – third-party delivery apps have been a strong driver for growth across its European markets, according to Vacovec.
The brand has more than 500 units the UK and has traditionally operated under three channels: dine-in, takeaway, and traditional delivery.
“We’ve evolved our dine-in heritage to meet new consumer needs, and doubled down on delivery and digital growth by increasing our presence on aggregators,” she says. “We’re going so far as to call it our fourth channel.
“That digital-first experience has cascaded to customers. We’ll continue to innovate our asset types based on [customers’] changing needs.”
Yum! Brands reported 6% growth in system sales across Pizza Hut globally in Q1 2023, with Europe at 3%.
The delivery focus and digital-first aspect will be key going into the coming years.
“Customers will see a younger and more everyday brand that continues to lean into its heritage,” Vacovec continues. “It’s our vision to be the first choice in pizza.
“Domino’s has a stronghold in the UK market, which we hope to change.”
Pizza Hut has launched its first express concept stores in shopping centres and service stations, catered to customers wanted a slice on the go.
As it celebrates its 50th anniversary in the UK, she adds that consistent agility will be key to keep the brand resilient.
One of its major adaptations was creating a seamless experience for customers, from adding kiosks and digitising stores to kitchen management and delivery dispatch systems.
”We accelerated the rollout of tools across the business and franchisee units – so we can improve efficiencies and ways of working not only for our business but also on how we deliver to our customers,” Vacovec adds. ”For example, we’ve been rolling out our HutBot, which is our shift running tool that supports store managers and helps smooth over unpredictability in staffing shortages.”
Another part of the brand’s evolution has been menu innovation to adapt to plant-based food trends, along with gluten-free and vegan options.
“We were the first to introduce Beyond Meat,” Vacovec says. “Menu innovation is important alongside really indulgent things people still love…our stuffed crust pizza continues to resonate.”
While profitability has been strained by cost pressures, she adds that franchise partners have remained resilient, with Pizza Hut is working with them to improve efficiencies.
“We need to make sure we’re driving profitable and sustainable transactions,” she adds. “Heavy discounting doesn’t work for franchisees even if the customer likes that.
“We also need to keep our everyday value in place for customers.”
Pizza Hut has also called for additional government support on business rates and utilities.
While macro-economic challenges have been persistent across European markets, the business is still seeing significant growth in markets where it has a stronghold, like France, Germany, and Poland.
“We’re leaning in quite heavily in France,” Vacovec explains.
She points to a “deep-rooted love” for the brand across markets as one of the markets of its resilience.
“There’s a love for the brand that might be reawakened, but we need to demonstrate agility, innovation, and nimbleness.
“I’m really excited about the next chapter for growth in the next five to 10 years…the UK and Europe can set the pace for other markets.”
With over 100 markets and 19,000 units worldwide, sustainability has been both a priority and challenge to implement across markets.
The business is focusing on reducing emissions and relooking at its supply system, as well as introducing more sustainable packaging.
“As part of Yum! Brands, we have exciting plans for how we can build a more sustainable business, which we will be able to share more details later in the year.
“There have been a lot of different crises in the last 50 years. I have confidence we’ll be able to weather through turbulent times…the power and resilience of the brand will continue.”
