BOSTON — A year ago at an industry conference, Greg Creed, chief executive officer of Yum! Brands, Inc., said the company’s Pizza Hut business “might be the brand that surprises everybody.” But even as the Louisville, Ky.-based company has churned out positive results in its KFC and Taco Bell units over the past year, the turnaround has been slower to take hold for Pizza Hut. Still, Mr. Creed remains optimistic.
|Greg Creed, c.e.o. of Yum! Brands|
“I think the great thing about Pizza Hut is we don’t have a pizza problem, we don’t have a product problem,” Mr. Creed told participants at the RBC Capital Markets Consumer and Retail Conference held June 1 in Boston.
The issue, he said, is consumers are having problems getting the company’s pizza. Whether it’s ordering the pizza or having the pizza delivered, the issue of easy access has been a major barrier to growth, Mr. Creed said.
“That’s very fixable,” he said, noting the company is putting more effort into executing a digital delivery-centric strategy for the brand in the United States.
Pizza Hut has been in so-called turnaround mode for several years. In 2014, the company doubled its number of ingredient and flavor options as part of a comprehensive menu overhaul, which included 10 new crust flavors, 6 new sauces and 11 new recipes. At the time, Yum! executives hoped the new flavors would lure lapsed consumers back to the brand. When that new platform failed to deliver expected results, Pizza Hut turned to a value approach the following year with the introduction of the Triple Treat Box, featuring two medium one-topping pizzas, an order of breadsticks and a dessert for $19.95. The brand also unveiled its version of a value menu, dubbed the $5 Flavor Menu.
While these efforts produced short-term, modest improvement, the business remains challenged.
In May, company executives announced plans to invest approximately $130 million over the next two years to resuscitate the Pizza Hut business in the United States. During the RBC Capital Markets Consumer and Retail Conference on June 1, Mr. Creed hinted at what the company’s resuscitation efforts might include.“I think as much as KFC is southern-inspired and Taco Bell is Mexican-inspired, we’ve now landed on a position that I think is truly, genuinely what Pizza Hut can own and should own in the pizza category,” he said. “You will see more of that in the coming weeks and months.”