Carving Out A Place In The Market
By Tom Boyles | PMQ Staff

A couple of years ago I met Simon Lumbroso at the Best of the Best competition. It was then I started to learn a little about his pizza company called Pizzacutters. Recently I had the chance to go through a Question & Answer session with Simon to discuss Pizzacutters beginnings, where they are today and what they have learned in the past 11 years in business.

Pizzacutters first opened in 1998 to offer premium quality gourmet pizza to the fast growing take away and home delivery market. Brothers Simon and Sam Lumbroso developed their concept to fill a void in a market by offering a fresh, quality alternative. Pizzacutters currently have 3 locations in Sydney NSW in Wahroonga, Castle Hill and Mona Vale.

Starting with a store in Northern Sydney, Pizzacutters has expanded into other locations around Sydney. Over the past 11 years Pizzacutters has won many awards judged by top chefs and food critics for product originality, flavour and quality.

In addition to the large selection of gourmet and traditional pizzas on the menu, each store also offers a variety of sides including chicken wings, fresh salads, gelato, cold drinks and their famous dessert pizzas. Stores operate seven nights a week and offer take away, pick up and home delivery.

Here is the Q&A session with Simon about Pizzacutters:

PMQ: What is the biggest difficulty you have had to overcome as a pizza operator? How did you do it?

Simon: When we opened our first store in 1998, the plan was for my brother Sam and myself to run the store on our own. Within 3 weeks we had 20 employees. That was a challenge; we had no idea then how successful our concept would become. Let’s just say we upset a lot of customers in those first few weeks as we did not anticipate the demand and were in no way ready for it. We worked hard and learned fast. The last eleven years have been a learning experience for us in that we now know you should never stop learning. These days a store opening runs like clockwork and we employ over 80 staff across our three stores. There will always be difficulties in running your own business and these are called learning experiences.

PMQ: If you could go back and change one thing about your business, what would it be and why?

Simon: I would have found a larger site for our first store in Wahroonga because we out grew it a long time ago, but the position is fantastic and everyone knows we are there.

PMQ: What is the best thing you have done that has contributed to your success?

Simon: We have never compromised on the quality of our product or service and continue marketing. You can have the greatest product on earth, but if no-one knows about it you won’t succeed.

PMQ: What is the best marketing you have done to bring more people into the store?

Simon: When we opened our newest store in Mona Vale we offered free pizza and gelato on opening day and we had a great response from locals. It’s a great way to get people to try your product. We also always support local schools and charities.

PMQ: What was the most difficult thing in owning two or three stores as opposed to owing one store?

Simon: Obviously you can’t be in two places at one time, so the larger you grow, the more you begin to depend on management and staff. We quickly realised that systems needed to be created and implemented which covered all aspects of the daily operation of the stores. PMQ: What advice can you offer to those about to get into franchising? Simon: Franchising is fantastic in that it provides an alternative means of expanding an existing business or an alternative means of entering an industry. Franchising blends both the benefits of big business and small business together. For those looking into becoming a Franchisee, do your research and remember the Franchisee/Franchisor relationship is a long term proposition.

PMQ: What is the first step it takes to begin the franchising process?

Simon: We are currently looking for prospective franchisees both in NSW and interstate. There are currently 3 options available to people wishing to join the Pizzacutters family, they are: 1. Existing - purchase an existing Pizzacutters site (if available) 2. Green field - brand new turnkey operation 3. Conversion - convert your current pizza business to a Pizzacutters store The first step is to either email Simon (myself) at simonl@pizzacutters.com.au or just give me a call on 02 9629 6788, I’m a really approachable guy and happy to speak to anyone interested.

PMQ: How has the economy affected you in the last 6 months and what adjustments have you made?

Simon: We are placed in the upper end of the Gourmet Pizza market, with average pizza price at $18 for a large pizza and $23 for an extra large pizza. With less people eating out at the moment, the current economic climate has increased customer numbers for us. We are however seeing an increase in sales of extra large pizzas, with some customers opting to share 1 extra large pizza rather than purchasing 2 large pizzas. Sales are still growing and so we have not needed to make any adjustments.

PMQ: What is the best advice you can offer someone who has been in the industry for a year or less?

Simon: The cost of labour and ingredients will keep rising and unfortunately we as pizza store operators cannot always pass on the increases through our own prices if we wish to remain competitive. It is important however not to let quality of service or product slide. If you must increase your prices to keep your quality and service high, then do so. Do not by cheaper ingredients or run your labour to lean, the customer will notice and you risk losing them for good.

PMQ: Do you offer dine in, takeaway or delivery? If you deliver, do you charge a fee and how far will you deliver?

Simon: Our stores are Take Away and Home Delivery. We charge a $4 delivery fee for all deliveries. We spend a lot of time developing our delivery areas, however a general rule of max. drive time of 25 min. round trip seems to work for us.

PMQ: What advantages did entering the Best of the Best give you?

Simon: We have entered the Best of the Best a number of times. We have come up best in NSW about 5 times. The advantages were enormous. If you go about it the smart way and contact local papers and radio the exposure is huge and it will take the business to the next level.

PMQ: There is a lot of talk about the WOW! Oven. You mentioned you have them. Why did you buy the WOW! oven and tell me what it has done for business? Is it worth it? What were you using before?

Simon: We have always used Middleby ovens, usually the PS360 wide belt. We purchased the WOW! oven for our newest store for a number of reasons: 1. We always buy new, and a new PS360 is almost impossible to get. 2. The WOW! oven will cook the product in a faster time, meaning more volume. 3. The WOW! oven runs more efficiently, we saw a 20% reduction in our energy costs.

PMQ: Do you have a POS? if so, how has it helped your business?

Simon: All our stores run a touch screen POS system. I don’t think we could operate without it anymore. Besides making order taking a lot simpler, we can track our drivers, analyse our sales and control labour.

PMQ: What is one piece of equipment you could not do without?

Simon: We really rely on most of our equipment to ensure smooth operation of the business; however without our oven we couldn’t make our product.

PMQ: What are your average sales per location? Has this increased or fallen off in the past year? Past 6 months?

Simon: Sales have grown for us over the past year, our brand is becoming a lot more recognised and with the current economic climate, the consumer seems to be moving towards good quality take away as opposed to dining out. We have seen the number of orders increase, however average spend has fallen slightly, with some customers opting for one XL pizza rather than 2 large pizzas.

PMQ: What is your best selling pizza?

Simon: Tandoori Chicken

PMQ: What is your best selling non-pizza item and what percentage of sales does this account for?

Simon: In addition to pizza we sell chicken wings, salads and gelato. In comparison to pizza sales these items are a small percentage; however it is definitely worth having them on the menu.