Iceland's Pizza Huts (mostly) to go, company says

REYKJAVIK, April 9 Fri Apr 9, 2010 10:16am EDT

REYKJAVIK, April 9 (Reuters) - Pizza Hut is shutting down all but one of its restaurants in Iceland because of an economic crisis that has killed demand for its fast food, the firm said on Friday, just months after McDonald's (MCD.N) left the island. Once a common indulgence for Icelanders, ordering a pepperoni pizza for delivery has become too expensive for many on the island nation of 320,000 in the wake of its spectacular financial collapse in late 2008.

Pizza Hut said it was closing two of its three restaurants after more than 20 years of operation due to reduced demand, the soaring cost of importing raw materials and the crash of the crown currency.

"It's obvious that families have less money to spend and restaurants are among the first things people cut," Pizza Hut manager Thordis Loa Thorhallsdottir told Reuters.

When fast-food giant McDonald's pulled out of Iceland in October for similar reasons, thousands of Icelanders lined up outside its outlets for their very last Big Mac on home turf. [ID:nLU632836]

Pizza lovers will not suffer the same fate, however, as the Yum Brands Inc-owned (YUM.N) delivery chain will keep serving customers at one location -- its most popular -- in a shopping mall near Reykjavik.

"We have a large stable of loyal customers and plan to keep going for a long time yet, despite the hardship this country is going through at the moment," Thorhallsdottir said.

A basic Pizza Hut pie with cheese sells for the equivalent of about $17 in Iceland.

(Reporting by Omar Valdimarsson; Editing by Michael Roddy)