Pizza Hut launches new brand as fast food defies the downturn

Fast-food chain Pizza Hut will rebrand several stores to launch its home-delivery pasta service this year, as the chain seeks to cash in on the fast food industry’s downturn-fuelled mini-boom.

Fast-food chain Pizza Hut will rebrand several stores to launch its home-delivery pasta service this year, as the chain seeks to cash in on the fast food industry’s downturn-fuelled mini-boom.

Pizza Hut, which is owned by United States food giant Yum! Restaurants International, is launching its new “Pasta Hut” brand in order to promote the group’s new home-delivered Tuscani Pasta products and capture more of the $11.6 billion fast-food industry.

Under the company’s plan, several Sydney Pizza Hut stores will be rebranded as Pasta Hut in the coming weeks, with the concept rolled out across the country over the remainder of the year.

The group is also introducing a host of other measures to boost sales, including a new lunch promotion to boost day-time sales (90% of Pizza Hut sales are at night). Other measures include up-to-date online ordering systems, a new website and more pizza products. The chain will also expand and renovate several of its stores.

Marketing director Angela Richards says the new brand is an attempt to widen the appeal of the Pizza Hut brand.

“The introduction of pasta is a move to give consumers more choice. We offer great pizza and will continue to offer pizza, but the move into pasta is to become more of a home meal replacement choice. We want to be as famous for our pasta as we for our pizza,” she says.

“Pizza and pasta are a very good fit, and have been really well received during testing.”

And despite the harsh economic conditions, Richards says the company is confident the new brand will help attract both new and existing customers.

“We are mindful of the downturn, but in terms of retail spending consumers at the moment are still buying from Pizza Hut – we’ve had the best start to a year we’ve had in seven years. It has become an affordable treat for them. Our customers’ money has shifted from eating out to more affordable treats. We’ll still continue to be part of their options to choose from. For right now, we can play a part during this value-conscious time.”

The rebranding comes at a good time for the industry, with the Retail Food Group posting a solid rise in sales for the first half of the 2008-09 financial year.

The company, which owns the franchising rights to Brumby’s, Michel’s Patisserie, Donut King and BB’s cafe, reports a 5.8% increase in weighted average weekly sales for the six months to 31 December.

The group also predicts a net profit of nearly $9.9 million after tax for the first half of the financial year.

“November and December were particularly good months and a lot of retailers expected the strength in November to be an aberration… but in December when the Government stimulus was delivered, it enhanced those sales even further,” chief executive Tony Alford told The Australian.

Alford also says while spending was down across the board, smaller low-value items are less affected by the downturn.

“Most of our chains have an impulse-buy or reward or time-out aspect to them, so as long as people continue to go into the shopping centres we’ll continue to get our fair percentage of the trade.”

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