Pizza Hut Adopts an Alias to Market Diversified Menu

Category Leader Going by 'The Hut' Amid Increased Competition From Freezer Aisle and Elsewhere

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CHICAGO ( -- Another surprising victim of the recession: delivery pizza. Improved frozen fare, more grocery-made pies and a profusion of high-quality mom-and-pop shops have led the billion-dollar pizza chains to expand their menus to include wings, pasta and sandwiches. But the larger selection seems to have created a bit of an identity crisis for industry leader Pizza Hut, which will begin calling itself "The Hut" in some of its marketing efforts.

The chain will be using the name 'The Hut' in some of its marketing efforts.
The chain will be using the name 'The Hut' in some of its marketing efforts.
Even as overall pizza consumption increases, "the large chains have been losing share of the pizza market for years," said Technomic President Ron Paul. As a result, he said, major companies are leaning on their next-best asset: massive delivery infrastructures that can bring a variety of fare to consumers' doorsteps in 30 minutes or less.

Pizza Hut's sales grew 4% to $5.3 billion in 2008, while Domino's sales fell 5% to $3 billion, according to Technomic. Pizza Hut holds about 18% of sales in the so-called pizza sector, a $29 billion category. Pizza Hut's share was nearly double that of Domino's 10%; third-place Papa John's posted sales up 3% during 2008, to $2 billion, snagging 7% of the market.

"Limited-service" pizza sales were up only 0.4% during 2008, and Pizza Hut and Papa John's gains lagged in comparison to those in the freezer aisle. Frozen-pizza sales jumped 6% to $1.2 billion according to Information Resources Inc., which doesn't include Walmart or club stores. Some top performers included sector-leading DiGiorno, up 14% to $228 million, followed by all private label, up 36% to $123 million.

Pizza Hut parent Yum Brands doesn't break out same-store sales by chain on a quarterly basis, but the company has cited weakness at the chain since the beginning of 2009. During the company's first-quarter earnings call, Yum President David Novak said the rest of the year will be challenging for Pizza Hut as consumers eat more at home. "Value continues to play an important role with our customers," he said, "and that is a challenge for us."

That's not to say that the company's non-pizza lines aren't successful. Pizza Hut's Tuscani pasta line, launched last year, has already surpassed $1 billion in sales. The chain is also in the midst of a massive reimaging effort, updating the look of its restaurants and adding "Wing Street" chicken wings at its 7,500 U.S. locations.

The Hut logo

'Not changing its name'
As a result Pizza Hut has developed a new logo that shortens its name to "The Hut," which caused a bit of a brouhaha as many pizza fans concluded the popular purveyor was changing its name. Not true, said the company. "Pizza Hut is not changing its name," Mr. Niccol said in a statement. "We are proud of our name and heritage and will continue to be Pizza Hut."

However, the chain will be using the name "The Hut" in some of its marketing efforts. A restaurant opening in Jacksonville, Fla., tomorrow carries both "Pizza Hut" and "The Hut" signs. In an e-mail, Pizza Hut spokesman Chris Fuller "The Hut" is to Pizza Hut what Coke is to Coca-Cola.

Yum Brands isn't new to adventures in nomenclature. KFC has been struggling with its middle initial for more than a decade, and the most recent creative for grilled chicken encourages consumers to "unthink KFC."

Brand experts advise Pizza Hut to tread lightly. "Powerful brands are owned by the customer," said Dean Adams, principal brand strategist at Level, Minneapolis, and former director of corporate brand management at 3M. "If you change it too much and customers aren't happy, they'll tell you about it." And an asset like "'Pizza Hut' is very valuable," he said. "I'd be cautious about messing around with it."

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