A Slow Return to Normal

 
March 25, 2002 | by James Bickers

Few if any businesses have had reason to cheer since the tragic events of Sept. 11. Even the pizza industry, which saw a brief spike in business in the days immediately following the terrorist attacks, saw that peak flatten.

In short, say spokespersons at several pizza companies, business is, well, business as usual -- some days up, some days down.

"Not enormously positive, not enormously negative; we've settled back into our regular momentum," said Holly Ryan, public relations manager for Domino's Pizza. "We were doing well before September 11, and while we saw a small spike the week after, we've returned to how we were before, which was doing well."

Bob Rooyakker, a franchisee of eight Little Caesars stores in Michigan, said business is up compared to last year. If anything, he added, the sagging economy -- made worse by the terrorist attacks -- typically helps companies like his.

"Little Caesars (is) known as a value-oriented product," said Rooyakker. "Because of the downturn in the economy, we should do better than we actually have done in a couple of years. When people have more shekels in their pocket, they tend to spend them on more expensive items."

Francis Alteri is the owner of Alteri's Restaurant, located in Clifton, New York (about five hours outside New York City). He said that other than a slight dip in business the actual week of the attacks, business has been steady over the past few months.

"It's about the same for us," he said. "We're family dining, and it really hasn't affected us too much."

At Papa John's, though, numbers are down. The company recently reported that sales are off 2.3 percent at franchised restaurants and 8.1 percent at company-owned restaurants, for the four weeks ended October 28. For the same period, industry leader Pizza Hut was down 10 percent compared to last year.

"It is a very tough, competitive market out there both in the pizza category and in the QSR category as a whole," said Karen Sherman, vice president of community and public relations for Papa Johns International, Inc.

While pizzerias throughout the nation have felt at least minor ripple effects from the attacks, restaurants closer to Manhattan were impacted dramatically.

Scott Cosentino, vice president and co-founder of Goodfella's Old World Brick Oven Pizzeria, which operates five restaurants in Brooklyn and Staten Island, said dine-in business is down.

"It's still a little off," said Cosentino, whose office is in view of where the Trade Centers once stood. "It's coming around, but in general it's off. Our delivery business has been well, but the in-house is a little hammered."

He also said weekend business is down drastically. Part of that, he speculates, results from people who work in the city not being ready to return for pleasure on weekends just yet. Cosentino said the challenge he and other New York City-area pizzeria owners face is getting customers' minds off the tragedy. It's difficult to create excitement about pizza, he said, when customer moods are weighed down by terrorist attacks and the recent jet crash in Queens.

"We're upping our advertising two fold, and doing a lot of PR, really pressing the quality issues," Cosentino said. "We're going into overtime on all that."

Change: Cyclical and Seasonal

Operators are looking forward to the holidays, the year's strongest sales period.

"We're coming up on a couple of our busiest nights -- Thanksgiving Eve is one of our five business nights of the year, and so is New Year's Eve," said Domino's Ryan.

Operators also are smiling since receiving an early holiday gift: low cheese prices. After a year of very high prices, including a block-rate peak of $1.74 in September, operators were more than ready for relief when the price plunged to the $1.25 range in late October.

Tim Carlin, a senior consultant at food industry watcher Technomic, is bullish on the pizza industry, saying 2001 should end with slight growth of 2 to 3.5 percent. For 2002, he says the worst case is flat growth, and the best case is a 5 percent boost.

"That's a positive and that goes back to pizza being a comfort food, when push comes to shove," he said. "People like buying pizza because they can sit around and eat it together."


Topics: Independent Operation


James Bickers / James Bickers is the senior editor of Retail Customer Experience, and also manages webinars for Networld Media Group. He has more than 20 years experience as a journalist and innovative content strategist, with publication credits in national, international and regional publications.
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