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Toppers Pizza's remodeling, digital efforts help brand stay relevant in 'fast casual environment'

The company expects its mobile site to launch by the end of this year and is investing 'seven figures' into additional digital initiatives.

Inside a remodeled Toppers location.

October 1, 2014 by Alicia Kelso — Editor, QSRWeb.com

Wisconsin-based Toppers Pizza is nearly done remodeling its system to a current prototype that has reduced costs and lifted sales. Most importantly, the new design keeps the 24-year-old brand relevant in an increasingly competitive industry, according to CEO Scott Gittrich.

Toppers recently reopened three renovated locations in college towns – Dekalb, Illinois and Oshkosh and Stevens Point, Illinois – that were in "desperate" need of a facelift. The Stevens Point unit, for example, first opened in March 1997 and hasn't been updated since.

The new design includes bigger lobbies, new TVs, more seating and a more modern look.

"There are clean lines, simple colors. There are fun, energetic brand elements that are relevant to Toppers," Gittrich said. "We actually reduced the prototype footprint by almost 10 percent. The challenge was to reduce costs."

Cost cutting came from changes to millwork, fixtures, etc. and, with a smaller footprint, maintenance is easier as well. As the brand continues its aggressive growth strategy, all new builds feature the updated design.

"Remodeling is more important today than ever. It's a necessity and I really think fast casuals pushed that necessity, particularly in QSR and our segment," Gittrich said. "They're pushing a consumer desire for updated designs."

Consumers aren't the only drivers behind an updated look – an influx of capital has also helped. Two or three years ago, money for these types of projects just wasn't available.

"The availability of capital now is there for people to invest in this sort of thing and you've got to do it. If your comps and AUVs are good, you have to invest that money back into your brand so you're still strong and relevant in the next several years," Gittrich said.

Growth plan

Toppers has historically had a heavy presence in college towns, but is growing fast in every type of market throughout the Central US – "between the Rockies and Ohio."

A few years ago, the company expected to hit 500 locations by 2020. Gittrich said that pace has slowed a little bit, but the expansion plan remains aggressive.

"I'm an operator by nature and I'm comfortable saying that if we take care of the business, the growth is going to happen. We're more or less on pace still, but we're focused on quality openings more than anything else," he said.

Toppers currently exists in 10 states. Its strongest markets include Chicago and Minnesota. The brand recently debuted in Michigan and is "going gangbusters there," Gittrich said.

"There is also good growth in Nebraska, Ohio, North Carolina, Indianapolis," he said. He expects the company to hit 70 units by the end of this year; 100 in early 2015. Toppers, Gittrich notes, is one of the rare concepts that actually grew threw the Recession.

 "We had an opportunity to pause and look at parts of our business and get them very right. It was certainly easier to hire and build people and we actually grew because the concept worked," Gittrich said.

Costs and technology

Although recovery has set in for most of the restaurant industry, challenges do remain. For a pizza brand like Toppers, the big hurdles are food costs – particularly cheese and beef – and labor costs.

"People are mostly absorbing the (food) costs. We're taking price to the extent we can," Gittrich said. "And labor pressures are coming from a variety of places – city, unemployment, minimum wage laws, tip credit laws – the myriad of those issues coming around are pressuring price."

Toppers does exist in some states where the minimum wage has increased already. Those locations have taken price through a combination of promotion and menu.

"Ultimately you have to take pricing somewhere. In those markets, the whole industry is more expensive. It just costs more to eat in those states, that's all there is to it," Gittrich said.

Toppers is also able to offset some of the cost pressures through its technology initiatives, which Gittrich calls a "substantial benefit" for the pizza segment. About 30 percent of its sales currently come from online orders.

"We're confident we're heading into the mid-40s this year and that in 10 years, I'm certain that 70 to 80 percent of our sales will come from our website," he said. "The day when we have computers and no phones in stores is just a matter of time; it's a matter of when."

Toppers is also focused on mobile and is in test for a new mobile site, expected to launch by the end of this year. Gittrich said the company is investing "seven figures" into additional resources that will come into play within the next 18 months.

"You have to invest in these things in layers because of how quickly they move and change. It's just a fast moving target. But you have to do it," he said. "Customer expectations have changed and without technology, you're less relevant in today's fast casual environment."

Culture stays the same

While the need for relevancy is more urgent now, some things haven't changed for Toppers; namely its culture. For example, although Gittrich touts the benefits of technology, he said it is just one piece of a much larger puzzle.

"There is still the human factor. The advantages brands like us have is we can touch the souls of people we serve. We can focus on what's unique and distinctive about us and food and service are still king," he said. "No website will make up for crappy service and food."

In addition to food (Toppers, for example, sells tater tot pizzas and mac and cheese pizzas) and service, the brand also refuses to grow up. It initially got its start on university campuses and so its branding, stores and staffing all comes back to that college-esque personality. Accordingly, even as it's grown into other (suburban) markets, restaurants stay open until 3 a.m.

"What's wonderful is the way we act. It's hard for someone like Pizza Hut to triangulate to. We do unusual menu items and that's consistent with how the consumer sees us. Staying up until 3 a.m. is just what we do," Gittrich said. "We say things like ‘shut the bland up, sauce was meant to be saucy.' Pizza Hut can't do that. And they shouldn't do that because it's not consistent with their brand."

Gittrich prides himself on being 51 years old and still maintaining the same approach he learned when he was 20. He does admit, however, that because he's aged beyond the target demographic, the company relies on its agency, data and, most importantly, its employees to stay on track.  

"I may not be 20 anymore, but I'm surrounded by a lot of them. Those are the people who are guiding our company. When you take a bunch of 20 year olds and you throw them in crappy polo shirts and make them say stupid stuff to their guests, they're going to do it for money, but we're more of a culture brand," Gittrich said. "Our people are enthusiastic. We have passionate ambassadors. So many brands are missing that now, but the customers can see right through that."

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