Will Pizza Hut's new burger sell better than McDonald's pizza did?

By Charles Passy

A look at the challenges restaurants can face when stepping outside their comfort zones

Pizza Hut is going into the burger business.

The popular chain, part of Yum Brands Inc. (YUM), is rolling out a new Cheeseburger Melt in the coming days as part of its Melts line of sandwich-style offerings. Specifically, the menu item features beef, applewood-smoked bacon, onions, and mozzarella and cheddar cheese, served between two thin pieces of pizza crust in place of the usual bun.

So, not quite a traditional burger - but Pizza Hut is touting it as a burger option nevertheless.

"Pizza Hut wants burger enthusiasts to cheat on their usual burger chain and prove their new favorite cheeseburger is from a pizza place instead," the chain said in a statement.

Officials at Pizza Hut didn't respond to a MarketWatch request for added comment about the product launch.

Pizza Hut has faced sales challenges of late. On a conference call accompanying Yum Brands' most recent quarterly earnings report, Chief Executive David Gibbs noted that Pizza Hut's same-store sales in the U.S. declined by 6% - though Gibbs pointed to some positives for the brand, such as growth in India.

Restaurant-industry analysts and observers say it shouldn't come as a surprise that Pizza Hut is going the burger route. The chain is simply following an industry playbook by branching out and trying to build an identity for itself beyond its core offering.

"Ultimately, a restaurant is a box, and you want that box to be as productive as possible," said Mark Kalinowski, a veteran restaurant-industry analyst.

Look at McDonald's (MCD). Though it became famous as a burger chain, it is now also known for its chicken offerings and breakfast fare. And, lest we forget, McDonald's even experimented with pizza for a while.

But like so many other items launched and sold with great fanfare, the McDonald's pizza didn't become part of the chain's permanent menu. And that shows the challenges that restaurants can have when stepping outside of their comfort zones.

It's not just that it can be tough to convince customers that their favorite burger chain can also turn out a good pizza - or vice versa. It's also that restaurants sometimes have to purchase new equipment or change some of their operating procedures when introducing items different from their norm.

And unless the item really takes off, it may not be worth the expense and hassle.

David Grossman, chief executive of Chicago-based chain Epic Burger, said he learned that lesson when he added chicken wings to his burger-centric menu. The fowl favorite was popular with his customers, but Grossman discontinued it in part because it meant having to change his fryer oil more frequently, which created operational inefficiencies.

Now, Grossman is careful to push things other than his burger basics. "You really need to stick to what you're good at and master that," he said.

Still, there are success stories beyond just McDonald's chicken sandwiches. Consider that many pizza restaurants do brisk business selling wings. And Arthur Bovino, a food writer and pizza authority, noted that some New York City pizzerias have become known for selling Jamaican-style beef patties.

It's all about giving the customer what they want, Bovino added.

"Sometimes, these smaller menu adds are a way for businesses to fit in with the culinary proclivities of their neighborhood," Bovino said.

Pizza Hut isn't the only pizza restaurant to try its hand at burgers, either.

Take Mercato Italian Kitchen & Bar, a small chain of restaurants in Connecticut. It's found success with a burger, especially with the lunchtime crowd.

Sam Devellis, co-owner of Market Hospitality Group, the restaurant company behind the Mercato concept, said the key was making the burgers Italian-themed, such as by topping them with an Italian-style cheese.

Devellis added that if you're going to think outside the box, you can't think too far. He noted there are certain menu items that he would be hesitant to offer.

"I don't know if I'd do Peking duck in one of my Italian restaurants," Devellis said.

-Charles Passy

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05-14-24 2137ET

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