Expresses a very negative opinion; it suggests something is the lowest possible quality or worst experience. The customer service at that shop is the pits.
Pro Tip 2/3
Informal Context
Used in casual conversations among friends or in less formal writing, not in professional or formal situations. Skipping that class was the pits; I miss all the important notes.
Pro Tip 3/3
Subjectivity
Reflects personal judgment or subjective opinion. What is 'the pits' for one person may be fine for another. For me, dieting is the pits.