Pizza Pizza opens grocery outlets: Small-town stores can now offer prepared meals

Sometimes a business opportunity can just drop in your lap.

Such is the case with one of Ontario’s largest pizza chains, Pizza Pizza, which has found a new audience for its massive slices and pies – hungry grocery shoppers.

By planting Pizza Pizza franchises in small-town grocery stores, the chain is hoping tired shoppers will order some pizza-to-go on their way to the checkout, alleviating the need to lug a load of groceries home and then prepare dinner.

Welcome to what may become small-town Ontario’s version of the latest grocery trend – prepared meals. While a smaller grocery store might not have the resources to prepare single serving – and somewhat sophisticated – meals on site, they can most definitely hire a few high school students to toss some ‘za’s.

And for Pizza Pizza, setting up mini-franchises on someone else’s real estate is a way to penetrate smaller markets where the population can’t support a stand-alone store.

Funny then, that the idea didn’t come from the folks at Pizza Pizza. Rather, it came from a grocery store owner.

According to Sebastian Fuschini, Pizza Pizza vice-president of franchising, the owner of a Freshmart grocery store (under the National Grocers umbrella) approached the chain and asked whether it was possible to open an in-store Pizza Pizza counter. It turns out that the owner was switching his banner over to iga – and was trying to come up with ideas to become more competitive in his market.

The Barry’s Bay, Ont. location, about 50 kilometres south-west of Pembroke, was ideal for the pizza chain, which has pretty well blanketed Ontario’s larger cities with its bright-orange signs and is now looking at expansion into smaller towns.

However, the space originally offered – the traditional butchering section of the store, which the owner had decided to eliminate – was too small, according to Fuschini.

The company, which has 265 traditional outlets, had managed to set up mini-outlets in 51 secondary schools, eight public schools, 42 business and industry locations and over 50 leisure and recreation institutions. And it had learned a few things along the way. Take, for instance, its Becker’s test.

The pizza chain decided to sell its slices off of heating racks in the Ontario convenience stores and found, much to its dismay, that product quality was adversely affected. Fuschini says it taught the company a valuable lesson: the only way to sell quality Pizza Pizza pizzas is to make them on-site.

So, the chain asked the grocery store owner to provide more space – at the front of the store, which also opened up delivery possibilities.

The owner obliged and, since opening in May, the results have been impressive, according to Vincent Solek, Pizza Pizza’s director of new business.

‘He’s got 200 feet and he’s going to do $300,000 a year,’ says Solek. ‘That’s $1,500 per square foot in sales – unbelievable.’

He says that, each week, the store is selling 700 slices and 300 pizzas, including those delivered.

Solek also attributes the store’s improved sales of soft drinks, baked goods and video rentals to the lure of pizza. While Pizza Pizza will not specify the figure for soft drink sales, it says that a four-month period (from June to September, a busy period thanks to the store’s proximity to Algonquin Park) saw a 22% increase in video rentals and a 27% increase in bakery sales.

The company is now trying to sell the concept to grocers. It attended the most recent National Grocers’ convention in Toronto and has placed some advertising in trade magazines, according to Fuschini, adding that there has been a lot of interest from independent grocers.

Despite the early success of the Barry’s Bay experiment, Fuschini doesn’t think the concept will sell in urban areas. Although many grocers have adopted a ‘Be everything to everybody’ philosophy – shoppers can now drop off dry cleaning while they pick up prepared pad thai – most cities have a pizza parlor at every major intersection.

‘This is for the towns that don’t have their Pizza Pizza outlet,’ he says. ‘There’s tons of them in Ontario.’

Pizza Pizza, known in this province for its bright orange signs and memorable telephonic jingle – 967-11-11 – does its advertising in-house. Its last ad agency was Padulo Advertising.