Pizza Express sells more pizzas through supermarkets than through its own restaurants and is, according to an industry analyst, an exemplar of a trend towards diversification among chain restaurants.
Chris Elliott, insight manager at consultancy Edge by Ascential, told the Financial Times that Pizza Express is in the forefront of this shift in an industry faced with high fixed costs and the challenge from home delivery brands like Deliveroo and Just Eat.
The chain sold 20 million pizzas in its 520 UK restaurants last year, but it expects to sell 33 million through grocery stores this year.
It’s all part of the industry focus moving “away from the dining experience by diversifying not just into retail but even outside of primary products in a bid to secure additional revenue”, said Elliott.
Zoe Bowley, Pizza Express UK managing director, put it more starkly: “We have had to take a step back and say we are no longer running restaurants, but that we’re a multichannel brand.”
It started down that route ten years ago with the launch in stores of its salad dressings, with pizzas following a few years later. Edge by Ascential estimates Pizza Express has recently increased the number of its grocery lines by 10% at the UK’s top six supermarkets.
Other restaurant brands availing themselves of name recognition and higher footfall at supermarkets include Nando’s, Yo! Sushi and Gourmet Burger Kitchen. For supermarkets, the attraction is a trusted, premium brand that can bring in new shoppers.
“It’s a winner-takes-all market,” observed Graeme Smith, managing director at the consultancy AlixPartners.
“You need to corner whatever your cuisine is. Be the brand that becomes the ready-to-make at home brand because supermarkets don’t like to stock multiple brands of the same cuisine.”
There are clearly opportunities for restaurant brands who can get their approach right, but it’s a difficult balancing act, warned John Vincent, chief executive of Leon. “You can’t do a grocery business by halves, but you have to do it in a way that doesn’t take away from the restaurant,” he said.
His ambition for the “naturally fast food” chain is that its ready-meal range will be worth as much as the restaurant chain within ten years.
Sourced from Financial Times; additional content by WARC staff