Rachel Reeves's 'brutal' economy blamed for Pizza Hut closures - 'serious trouble'

The collapse of Pizza Hut into administration highlights the grim reality of Rachel Reeves' economy, says financial experts. On Monday, the food chain announced it will close 68 restaurants and 11 delivery sites, making 1,210 workers redundant. The chain's struggles reflect a "brutal market squeeze" on the high street after the Chancellor hit businesses with "rising employment expenses" and increased taxes last year, experts warn. Dariusz Karpowicz, Director at Albion Financial Advice, said the collapse offers yet another glimpse into the harsh challenges of hospitality and the high street.

He said: "Pizza Hut's dine-in collapse serves up a bitter slice of reality for Britain's struggling high street. When even household names can't keep the lights on, you know the casual dining sector is in serious trouble. The numbers tell the story: soaring energy costs, rising employment expenses, and families treating restaurant meals as luxuries rather than regular treats. Delivery apps have eaten into traditional dine-in profits whilst post-pandemic consumer habits remain firmly changed."

He continued: "This isn't just about one pizza chain going under, though. It's hundreds of local jobs vanishing and more empty shopfronts joining Britain's hollowed-out high streets. The government needs a genuine long-term strategy, not election-winning soundbites."

Similarly, Tony Redondo, Founder at Cosmos Currency Exchange, said what has happened to Pizza Hut is "a classic retail problem".

He said: "Being second-best at everything kills you faster than being excellent at one thing. Pizza Hut's struggles reflect a brutal market squeeze.

"Rising costs, changing consumer preferences toward either upmarket dining or budget delivery, and an inability to differentiate ultimately sealed their fate."

The restaurant's UK owner, DC London Pie Limited, appointed FTI Consulting as administrators on Monday following mounting financial pressures.

Within hours, Pizza Hut's global parent company Yum! Brands, which also owns KFC and Taco Bell, intervened with a last-minute rescue deal to save part of the operation.

The agreement ensures the continuation of 64 dine-in restaurants, securing around 2,259 jobs that will now transfer to a new Yum! equity business. However, the remaining 68 locations were not included in the deal and now face an uncertain future.

Omer Mehmet, Managing Director at Trinity Finance, said "Pizza Hut's collapse is another reminder that the casual dining model hasn't recovered from the pandemic hangover".

He added: "Rising costs, tighter consumer budgets and competition from delivery apps have squeezed margins to breaking point. It's a sign of how even household names aren't immune when eating out has become a luxury for many families.

"Sadly, it's not just a brand going under, it's hundreds of local jobs and high-street spaces at risk."

A spokesperson for the pizza chain said: "Today we announce the acquisition of the Pizza Hut dine-in operations through a pre-packaged administration, after FTI was announced today as administrators of DC London Pie Limited, a franchisee of Pizza Hut dine-in restaurants.

"We are pleased to secure the continuation of 64 sites to safeguard our guest experience and protect the associated jobs."