We hear talk of the two speed economy all the time in the media – but it can just as well apply to pizza businesses in Australia.
Emil Parthenides, the founder of the 131 PIZZA network for independent pizzerias as well as operator of the Better Box Company, whose work means he gets to deal with a wide range of pizza operators around Australia, says there are pizza businesses who are doing phenomenal trade while others have found the last year incredibly tough and are struggling to turn their operations around.
“Things have really changed [in the industry], it’s so much more competitive now,” Parthenides says. “And I think what you have in the industry is pizzeria operators and you have business operators and they approach things very differently.
“The pizzeria owners who were successful in the 1980s and the early 1990s are the ones who are finding it tough – the whole game has changed. These days it’s very hard to own a pizzeria and also still working in there making the pizza.
“You really need to work on the outside of it and grow it from the outside – otherwise if you are there every day and making pizza you don’t have the time to be thinking about ways to grow the business, and to be across all the reportings that you need to be across.”
Parthenides, who’s been advising pizzerias as part of the development of the 131 PIZZA network (which hands independents the advantage of one easily recognisable phone number), decided last year to, as he says, put his advice to the test, and purchased his own pizzeria business.
Parthenides bought Gallery 324 in Melbourne’s South Yarra last March and set about turning around what was a declining business – with impressive results. Implementing strategies and ideas he’s learned from seeing both successful and failing businesses, he’s been able to stop the haemorrhaging and achieved 30 per cent growth at the business within the first six months.
He’s now in the process of renovating the restaurant side of the business with plans to extend trading hours into breakfast, and install a coffee “window” to cash in on the booming demand for quality coffee.
In January business was 40 per cent up on the previous year with Gallery 324’s home delivery market having grown from doing around 490 deliveries a week to the current 750.
“We’re actually at a point where we can’t grow any more so I’m just about to renovate and expand the cafe side of the business more and make the most of that space,” Pathenides says.
Parthenides said he bought the restaurant because he “loves a challenge” but also because he wanted to show how a failing store could be turned into a successful one by implementing some simple strategies, and being pro-active.
“I know of nine stores that have closed down in the last year and even just recently my major competitor just ten metres from me has closed down,” says Parthenides.
“Now the thing is we’re not the best – there’s no such thing as the best – but we have a good product and we are very happy with what we are doing. And we are very consistent. But what we’ve done is put a lot of work into our marketing and thinking of ways to build and streamline the business.”
Parthenides says when he took over the business it had experienced a 30 per cent decline in sales in the previous two years, and needed a major injection of passion and business nous. One of the first things he did was to get family and friends to experience the business, to go in and dine, order home delivery and pick up. He then constructed a list of the negative feedback.
One issue was the cleanliness of the store so a thorough cleaning was top of the agenda. And with waiting times for delivery and the temperature the pizza arrived at both issues, Parthenides put strong focus on improving the delivery service – with a strategy that also increased his marketing muscle.
He boosted the number of delivery scooters on the road from six to nine (he now has ten) and had them all boldly sign written with the 131 PIZZA number prominently displayed along with the succinct offer – “Beer, wine, RTDs & Pizza”. The store frontage also got a new paint job clearly promoting the number and Gallery’s website address to the passing traffic.
“I added the 131 PIZZA number and I advertised it all over my shop and on my bikes – if you have one of them sitting in front of you in traffic for two seconds it’s a number you will remember,” Parthenides says. “But our old number – 9827 6066 – who would remember that?
“We have really built the brand. People know us for deliveries now – everyone in the area knows the Gallery 324 scooters. If you drive around our area you can’t miss them. For me that’s been one of our great marketing tools.
When you’ve got ten scooters out all night from 4pm people see them and they think that must be a busy place.”
The growth in home delivery has had its challenges as well with Parthenides having to implement systems to ensure customers weren’t turned off on very busy nights because of a potential blow out in delivery times. Staff now closely monitor the number of home delivery orders and if they begin to reach unmanageable levels begin telling customers it’s pick up only.
“New Years Day for example and AFL grand final – you learn there are certain days when things get out of control and, even though we have ten riders, deliveries can blow out to two hours,” Parthenides says. “I tell my staff when you start to see a full book, about 100 orders, that’s when you start telling customers no more delivery orders for half an hour. And if delivery time starts to go over an hour then no more orders at all.
“It’s the same if you go to a restaurant and it’s fully booked and you can’t get in. You might be disappointed but you will think that must be a fantastic restaurant to be so busy. But if the restaurant just squeezes you in but is very full and then you don’t get served for an hour you’re going to be upset and maybe angry – the same applies for deliveries. If you keep taking and taking deliveries when you are busy you are only going to disappoint people and I hate that.”
But even when things do go wrong Parthenides has turned the situation into a positive. “Valentine’s Day was a perfect example – we had 140 orders come through within half an hour and the staff didn’t get around to switching it off fast enough,” he says. “Tuesday nights aren’t usually busy for us and I didn’t think Valentine’s Day would be big. But I could see on my phone staff were still taking orders so I called and we stopped delivery.
“The next day, because I know a lot of the customers were online customers and might place a negative review on Menulog I got my staff to ring all the customers who got late deliveries – we were talking two, two and a half, hours. We offered them a free large pizza. The manager said every person was so happy.”
But even on days when business might not be pumping Parthenides doesn’t sit and wait for customers to pick up the phone, tap an order into their computer or walk in the door. He takes advantage of the 17000 customer database he has built up using his POS technology and if business is quiet he’ll have up to 5000 text messages sent directly to their phones.
“We text at about 5pm each night just to remind people that Gallery is open and that we deliver – things like reminding them that we can deliver a bottle of wine if they like and not to forget that they’ll get a free garlic foccacia along with it,” he says. “It’s such a valuable tool – if you’re having a quiet night you can text 2000, 5000 if you want to and all of a sudden you can turn a quiet night into a busy night. We try to maximise every night so we’re never quiet. You can’t sit in your shop just waiting for people.”
Parthenides put a major focus too on Gallery’s website and its online and mobile phone ordering options, joining forces with web experts Zwift to help optimise it. And his latest new feature, a smart phone app launched in October, has quickly become the leading tool people are using to place orders. “We get thousands of dollars through online orders a week,” says Parthenides. “And I would say about 65 per cent now come from our iPhone app. We’re now getting more orders through that than the website, it’s amazing.
“And we really promote it – you have to make sure you promote the hell out of it. It’s a waste of money if you aren’t letting customers know that you offer these things. They are not just going to stumble across it.”
Emil joined Benchmark in 2013, Emil remains one of the hospitality industries most reputable & knowledgeable persons. Emil has developed a huge network within the hospitality industry and remains director and founder of the independent pizza group ‘131 PIZZA’ which is now the 4th largest pizza group in Australia with 142 stores nationally.With food industry networking links to manufacturers, wholesalers, tech suppliers, hospitality business owners & investors nationally Emil is in best position to broker a successful deal for you.Get the right business value with our business brokers at Benchmark.
Keywords: Small Businesses for Sale, Australian Businesses for Sale, How to Sell a Business
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