Pizza: a tough chew for supermarkets

September 01, 2009

Here’s a story where the little guy wins almost all the time

Here’s a story where the little guy wins almost all the time - because it is the independent pizzeria operator, the small regional chain, or the chain franchise location (Domino’s, Pizza Hut, Little Caesar’s) that has the ‘package’ supermarkets may covet but find hard to copy or create a special twist to build a following.

That ‘package’ includes foremost: 
•    Quick in-and-out convenience
•    A local reputation as a family gathering place (many feel strongly about supporting local businesses)
•    Consistent quality food that keeps hot and tasty (either served quickly in the pizzeria, or delivered in thermal bags that keep it at 150 degrees for up to an hour)
•    Access to top-grade ingredients (doughs, cheeses, sauces, toppings) through a distribution system that hasn’t opened up for many supermarkets through the years.

With the rare exception of, say, a Whole Foods Market, the vast majority of supermarkets wouldn’t likely muster what it takes to siphon patrons away from a distinctive American neighborhood fixture:  the pizza joint.

“Neither the average pizza chain, nor the independent owner, would cooperate in running a branded or co-branded eatery within a supermarket. They’d see the food store as a competitor trying to encroach on their market,” Jeremy White, editor-in-chief, Pizza Today, told in an interview.

Pizza and supermarkets are already partners - in the frozens section, with such examples as brands from California Pizza Kitchen and Home Run Inn.

But it doesn’t seem easy for most supermarkets to develop their own proprietary pizzeria business, even if they wanted to. It’s not in their nature to devote such time, space and expense towards ovens and the skilled labor that would be absolutely necessary to thrive. Would a supermarket risk its carefully crafted brand and invest heavily in an effort where chances are high it wouldn’t excel against so many quality, local competitors?

As an analogy, does anyone think that sushi from a supermarket compares with sushi from a trusted local restaurant? Slightly past dinnertime, markdowns hit the sushi case to salvage sales from potential overnight waste. Is this an image stores want to repeat?

“The public isn’t wired to see supermarkets as sources for high-quality, fresh pizza. I don’t think they ever will be,” said White.

Still, some retailers may sniff around the numbers - nearly half-a-million dollars in average volume across 70,000 pizzerias in the United States (65% chains) - and think ‘why not.’ But without all the right ingredients of theatre, aroma, and consistent quality, the profitability may never come.