New Pizza Hut CEO Pushes ‘Modern Pizza Experience’
Artie Starrs made the move from president to CEO of Pizza Hut August 5.
Artie Starrs is sitting in the same office and working with the same people, but the new CEO of Pizza Hut is facing a different set of challenges as the brand drastically adjusts its footprint to better align with recent technological investments and retake its No. 1 spot among American pizza chains.
“I’m getting my arms around what’s going on,” says Starrs of his first few weeks in the top leadership role of a brand with 7,449 U.S. restaurants and another 11,000 in 120-plus international markets. Broadly speaking, he says his philosophy at the outset is, “Let’s learn a lot and make sure best practices are getting shared around the world.”
Pizza Hut’s plan for its U.S. locations will require much of Starrs' attention as the brand announced in July it would close underperforming dine-in units in favor of stores built to its “Delco” model that’s better suited to carryout and delivery. While the news that Pizza Hut could close more than 400 restaurants garnered plenty of attention, Starrs says the move is in line with where he’s been leading the brand since 2016.
Starrs, who spent the last three years as president of Pizza Hut, says his focus then was in “grounding the brand in the modern pizza experience. So that for us meant investing in digital and investing our efforts in delivery.”
Starrs was a driver of many of the Pizza Hut’s recent efforts aimed at improving the customer experience, including faster delivery and several digital initiatives such as the introduction of its delivery tracker. Starrs also led Pizza Hut’s acquisition in 2018 of QuikOrder, the online ordering engine for U.S. locations.
“We’ve had massive growth in our digital business. Our off-premises business has been growing nicely,” says Starrs, noting 90 percent of Pizza Hut’s business is through delivery or carryout.
Top competitor Domino’s likewise is driving sales thanks to its delivery business, and is further distancing itself from Pizza Hut as the largest U.S. pizza chain after taking over the top spot in 2017 when it hit $12.2 billion in systemside sales. While Pizza Hut was able to increase topline sales by 1.5 percent to $12.2 billion in 2018, Domino’s turned in a stellar year, growing sales 10.2 percent to $13.5 billion.
Too further boost its exposure to delivery customers, Pizza Hut began a test with Grubhub earlier this year and has about 700 restaurants on the third-party platform. The move comes after parent company Yum Brands invested $200 million in Grubhub in 2018 and its Taco Bell and KFC brands have seen early success on the platform.
Starrs, who prefaces his comments by noting he sits on Grubhub’s board, says, “We view that platform as a way to access incremental customers.”
“It’s an important access point to make sure we are where our potential customers are,” he continues, noting Yum's investment in Grubhub means Pizza Hut also has access to customer data.
The majority of orders placed via Grubhub are still being delivered by Pizza Hut’s drivers, Starrs points out, and only in some areas “where we can use additional delivery support” are Grubhub drivers executing delivery. Starrs stresses Pizza Hut is being mindful of the customer experience as it innovates around delivery, and “we would never offload that business to anyone that didn’t treat it with the same care we did.”
When asked if he could envision a time when third-party networks replace Pizza Hut’s in-house delivery drivers, Starrs responds, “No, I don’t.”
“It’s a competitive advantage for us,” he adds of Pizza Hut’s network of more than 50,000 drivers.
Pizza Hut is also testing “Hut ‘n Go” digitally powered cubbies (pictured at right) wherein customers order and pay in advance and pick up their pizzas from a cubby without ever interacting with an employee. “It’s a 100 percent digital experience with the brand,” says Starrs.