Pizza Hut Introduces $5 ‘Crafted Flatzz’ to Boost Sales Amid Value Perception Crisis in U.S.
In an attempt to revitalize its sales, Pizza Hut, a subsidiary of Yum! Brands, is introducing a new offering – the $5 “Crafted Flatzz”, a thinner and crispier version of the Personal Pan Pizza. Designed for budget-conscious lunchgoers, these single-serving pizzas are part of Pizza Hut’s strategy to regain its footing in the US market following seven consecutive quarters of decline.
Executives attribute these losses to customer confusion surrounding deals, as consumers shift towards competitors offering better deals and innovative menu items. During the second quarter, Pizza Hut experienced a 5% drop in US sales compared to its rivals, while Domino’s Pizza and Papa John’s reported positive results following their own sales slumps.
Domino’s, which had a dip in US sales during the first quarter, has found success through new menu items and rewards programs, including the launch of the Parmesan Stuffed Crust Pizza and a revamped loyalty program brimming with deals. The partnership with DoorDash for delivery also boosted same-store US growth to 3.4%.
Papa John’s sales increased by 1%, marking a turnaround from several quarters of decline. Orders of pizzas surged by 6%, forming part of the chain’s long-term strategy to focus more on pizza and less on sides and sandwiches. A $6.99 “Papa Pairings” menu also contributed to increased pie orders.
On an earnings call, Papa John’s CEO Todd Penegor commented that the chain’s performance demonstrated both “the power of our deep focus on our core product as well as value.”
In contrast, Pizza Hut has faced challenges due to a perceived lack of competitive value in its offerings. R.J. Hottovy, head of analytical research for Placer.ai, asserted that Pizza Hut trails behind its peers because its value message hasn’t stood out like Domino’s and Papa John’s.
To counter this, Pizza Hut is ramping up promotions, such as extending $2 Personal Pan Pizzas on Tuesdays and Wing Wednesdays, and introducing the Crafted Flatzz. Pizza Hut CEO Aaron Powell believes targeting the lunch crowd could help, as more than two-thirds of their pizza sales occur after 4 pm, making the earlier time period an “area of significant opportunity” for the chain.
The new offering caters to individuals who want pizza but cannot finish a whole pie. With popular items like Personal Pan Pizzas and Melts (calzone-like concoctions) on its menu, Pizza Hut aims to provide new formats of pizza suitable for consumption at any hour. As Powell stated, “People love pizza all day. It’s up to us to bring the new ways of allowing people to have formats of pizza they can eat at any hour.”
The Crafted Flatzz are available in five options – chicken bacon ranch, three cheese, Nashville hot chicken, pepperoni, and The Ultimate (which includes toppings such as pepperoni, Italian sausage, caramelized onions, and cheese). Available until 5 pm local time for $5, the price increases slightly after that depending on location. The primary goal of Crafted Flatzz is to stimulate midday traffic, which has yet to recover to pre-pandemic levels according to Hottovy.
While competition remains stiff, the launch of the $5 Crafted Flatzz could help enhance Pizza Hut’s perceived value and attract more customers during lunch hours, as Hottovy suggested to CNN. Powell declined to elaborate further on Pizza Hut’s problems but acknowledged that consumers are “being very choosy with where they spend their money because there are challenges with confidence.”