Author Topic: Hard Times for Pizza Biz  (Read 3507 times)

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Offline Pete-zza

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Hard Times for Pizza Biz
« on: August 16, 2008, 07:51:51 AM »
Reports are swirling around the pizza biz that Uno's Chicago Grill is having financial difficulty (it apparently missed or is delaying an interest payment on a loan), as noted at http://www.thedeal.com/dealscape/2008/08/pebacked_pizzeria_unos_may_ser.php and http://www.bloomberg.com/apps/news?pid=20601103&refer=news&sid=aJ4UUvNi7BQs. The company itself says that it is looking to recapitalize its financial structure.

As the articles also note, another company, Midland Food Services, owner of 92 Pizza Hut stores, recently filed for bankruptcy.

Over the past few months, I have also noted several independent pizza operators at the PMQ Think Tank forum who have reported that they are closing up shop.

Peter



Offline fazzari

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Re: Hard Times for Pizza Biz
« Reply #1 on: August 16, 2008, 07:27:24 PM »
There are guys from our Chambers of Commerce who think that if the media would quit the hype, our economy would show itself to be in good shape.  But, the reality is, after a family spends a fortune filling up the gas tank, and then goes to the grocery store to pay ever increasing prices for goods, eating out is becoming a luxery to some families.  As far as business owners go, the prices of our goods are increasing too, as well as the ever increasing costs of labor and its benefits....sometimes you just can't pass on all the costs, and then you get eaten alive.

JOhn

Offline Park.Pizza

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Re: Hard Times for Pizza Biz
« Reply #2 on: August 19, 2008, 10:31:28 AM »

The mom & pop shops here in Milwaukee are feeling the pinch. With material & energy cost climbing, my price/profit margins are not as nice as it use to be.  And it's not fun telling your customer of a price increase.

We're starting to see a few more pizza shops for sale in the local paper. I've heard some rumors about California Kitchen having grown to fast and is seeing some of their stores struggling. Can anyone confer?

Tim
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Offline Pete-zza

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Re: Hard Times for Pizza Biz
« Reply #3 on: August 19, 2008, 11:18:12 AM »
Tim,

California Pizza Kitchen is not immune to the softening of the economy and increased costs, as noted in this stock downgrade article at http://news.moneycentral.msn.com/ticker/article.aspx?Feed=AP&Date=20080731&ID=8966408&Symbol=CPKI. However, earlier this month, CPKI raised earnings guidance for 2008 even though same-store sales may be flat to down 1% for the year, as noted at http://www.reuters.com/article/marketsNews/idINN0735366420080807?rpc=44.

Domino's is apparently trying to broaden its food business by announcing within the past few days that it plans to offer hot sandwiches: http://www.qsrmagazine.com/articles/news/story.phtml?id=7149&from=rss. Pizza Hut recently went to offering pasta dishes to broaden its food offerings.

Peter

Offline Mad_Ernie

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Re: Hard Times for Pizza Biz
« Reply #4 on: August 19, 2008, 11:26:29 AM »
Tim:

If you don't mind me asking, which pizzeria are you affiliated with in Milwaukee?  I only ask because I spent some years there as a kid in the 70's and still have a few fond memories of the area.

-ME 8)
Let them eat pizza.

Offline Park.Pizza

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Re: Hard Times for Pizza Biz
« Reply #5 on: August 19, 2008, 01:46:53 PM »
-Pete,

I tried the Pizza Hut Pasta. It wasn't all that great. Maybe sat to long in the heater oven. Dried out.

-ME

I only have a little par-bake catering deal that I make pizza's for the local golf course. Talking to the local restaurant depot sales clerk, he is hearing more peoples complaints about material/product increases.

This is not a mega money making venture for me. Just an out of control hobby. Once it gets to the point of failing into the red, then I'll give it up.

Tim
« Last Edit: August 19, 2008, 01:55:44 PM by Park.Pizza »
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Offline enchant

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Re: Hard Times for Pizza Biz
« Reply #6 on: August 20, 2008, 08:01:51 AM »
It appears to me that opening a pizza shop seems kind of fun to a lot of people.  They (like many of us here) learn how to make pizzas that are better than what they buy at most of the local joints and figure that they can kill two birds with one stone - fulfill their passion for making pizza AND make a profit.  I briefly toyed with the idea myself. 

When I moved to my current town thirty years ago, there were two places to buy pizza.  Since then, God knows how many have come and gone. There have been as many as a dozen open concurrently, but they rarely stay around for more than a couple years.

It seems that the places that stay around are family run.  At least it seems that way to me.  There are often children helping out.  Cheap labor if you can get the wife and kids to work.

I also think that most of the general public doesn't appreciate a quality pizza.  They've been weaned on Papa Gino's, Pizza Hut or the local House of Pizza, and couldn't give a rat's hiney that you experimented for years before settling on that perfect brand of buffalo mozzarella.
--pat--

Offline Mad_Ernie

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Re: Hard Times for Pizza Biz
« Reply #7 on: August 20, 2008, 09:12:59 AM »
It appears to me that opening a pizza shop seems kind of fun to a lot of people.  They (like many of us here) learn how to make pizzas that are better than what they buy at most of the local joints and figure that they can kill two birds with one stone - fulfill their passion for making pizza AND make a profit.  I briefly toyed with the idea myself. 

When I moved to my current town thirty years ago, there were two places to buy pizza.  Since then, God knows how many have come and gone. There have been as many as a dozen open concurrently, but they rarely stay around for more than a couple years.

It seems that the places that stay around are family run.  At least it seems that way to me.  There are often children helping out.  Cheap labor if you can get the wife and kids to work.

I also think that most of the general public doesn't appreciate a quality pizza.  They've been weaned on Papa Gino's, Pizza Hut or the local House of Pizza, and couldn't give a rat's hiney that you experimented for years before settling on that perfect brand of buffalo mozzarella.

I like your observations and comments, Pat.  The 'family run' point I think also translates into family fun.  Early chains like Shakey's and Round Table knew the value of appealing not just to adults or teenagers but to the family unit.  'Come here, let us cook you a good inexpensive meal, and let the kids have some fun.'   Nowadays, places like Showbiz try to 'Wow' everyone with that same concept, but with more chaos and less quality food product.  I remember a place in the suburbs of Chicago my family went to that just tried to be a nice, comfortable place that a family could go for dinner - and it was not a chain establishment.  American society has bought into the concept of 'give me the same food that I got here the last time regardless of how good it is'.  The very idea  pizza from Papa John's or Pizza Hut could be somewhat different each time you ordered one would be akin to making a donut square with 3 holes to Dunkin Donuts.  The message of the business culture is 'aspire to mediocrity'.
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Offline telehort

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Re: Hard Times for Pizza Biz
« Reply #8 on: August 25, 2008, 07:52:35 PM »
I also agree with your comments Mad_Ernie about the public and pizza quality.  I have started a small mobile wood fired pizza catering business on the side and the majority of the population have no idea how much time, thought, and effort go into making the decision on which dough, sauce and cheese combo you decide to build your business on.  We have a certain pizza-pizza place in our town and some of my clients have asked why can't I put out a $5 pizza like they do, you try to explain the finer points of what your are trying to provide as far as a product and it is lost on them.
But then they smile when they eat my product and in my head I forgive them for not getting it.