David vs. Goliath: The Independent vs. the Multi-National

When the multi-national pizza operator comes to your town there is a natural apprehension that they will adversely affect your pizzeria.

This is a fear that Bob de Groot, CEO of Gelato Premio, allays with his customers. Bob has been in the quick service restaurant business for over 20 years as a distributor and marketer of the leading conveyor ovens and gelato equipment. He has seen the proliferation of the multi-nationals firsthand and is quick to point out that they are primarily competing with the other fast food brands ; the burgers , the chicken and the local takeaway. The independent pizzeria is a destination…a place to take a friend or the family for a meal. Generally the visit has been planned and the diners are looking forward to higher quality food, either eaten in or taken home.

That varies greatly from the impulse purchaser of a quick bite on their way home often after a visit to their local hotel or club. They have less than ten bucks to spend and the choice comes down to who is offering the cheapest deal.

Is it the $5.95 pizza, the $5.50 burger, fries and drink meal deal, half a chicken and chips or the infamous kebab. The independent pizzeria competes with other restaurants. They offer a menu selection of entrée, main and dessert. Customers can choose to sit down in comfort or take their choice home. It is that selection that is the point of difference. Sure they know they are paying more, but they are getting a night out. And that is what the independent offers and what the fast food operator cannot. Good pasta and pizza restaurants know how to value add. They understand that keeping their customers longer means more dollars in the cash register. As Bob points out selling a dessert with coffee to a table of four significantly increases the per table profit.

When that dessert is made fresh in the restaurant it elevates the independent to a higher level. They are perceived as not just a pizzeria that paints the sauce on with a pastry brush and portions the other ingredients from a shot glass.

The independent makes a proper pizza. And that is something they should never lose sight of. So when the multi-national comes to your area consider it a compliment. Don’t see it as a threat to your business. They obviously see the potential in the area. They will attract the first-time pizza buyer and whet their appetite for the category. There is every likelihood that this experience will tempt them to sample a quality product at their local independent pizzeria.

One of Bob de Groot’s more recent experiences was with a country town independent pizzeria who was courted by a multi-national to become a franchisee at a fairly substantial cost. They chose to remain independent and were soon confronted by the new competition. They invested in the Gelato Premio system and for two weeks prior and four weeks during the opening of the new franchise offered their customers free gelato with every two pizzas ordered . Instead of losing business they gained it. Gelato Premio contributed to the promotion by supplying the ingredients free of charge. Independents; stick with your principles. Don’t price match.

It is far better to make $5-10 a pizza and have a satisfied customer who comes back than make $1 from a customer who wondered just what is was he spent his $5.95 on…and value add with something they cannot offer.