Johannesburg - Scooters Pizza had identified growth opportunities in the middle-class market and, unlike its main competitor Debonairs, which aggressively services low-income earners, it planned to open more restaurants in more upmarket areas, the pizza chain said yesterday.
Scooters Pizza, which is owned by JSE-listed restaurant chain and jewellery retailer Taste Holdings, has about 124 outlets, excluding its restaurants in Zimbabwe.
The restaurants are run as franchises and are owned by individual franchisees.
Scooters Pizza marketing manager Sean Lilley said the franchise’s future growth was likely to come from consumers in the living standards measures between 6 and 10. He said pizza franchisees were finding it hard to compete with offerings such as chicken and burgers consumed by lower-income earners.
This is despite the fact that Debonairs, which has about 400 franchises in South Africa and elsewhere in Africa, sells pizza in the busiest taxi ranks and train stations in South Africa.
Lilley said the franchise also wanted to reinforce to consumers that it was a family brand. “We have seen a lot of families buying our pizzas in four and sharing them. We have also seen a lot of growth coming from the younger market.”
Scooters Pizza plans to open about 20 stores next year with more focus in Johannesburg. The franchisor will also look at areas such as Limpopo and KwaZulu-Natal.
“Although we have a few restaurants in almost every province in South Africa, we have opened most of them in Johannesburg this year and this will also be our focus next year.” He added that this was due to the growing market size and opportunities in the Johannesburg area.
He added that Scooters Pizza had an aggressive expansion strategy for next year, which included expanding in regions outside of Africa.
Scooters already has outlets in Zimbabwe and will open one in Mozambique in the next month or two.
Scooters has had to close some stores due to high rentals.
“Sometimes when a franchisee closes down we assist them to relocate into another location.” Lilley attributed the closure of restaurants to the high number of new malls.
“There are so many malls opening and often the franchisee is in a mall which becomes redundant as other shops move into a bigger mall a kilometre away. This puts [the] franchisee in a tight spot.”
Lilley said franchisees were facing the challenge of many restaurants offering pizza. “The number one challenge is having competitors opening in the same target area sometimes up to 100 metres away.”
Another big challenge was the aggressive approach to promotional strategies from competitors, “who in the past have managed to outplay us on promotional, advertising and product strategies”, he said.
“We have become more scientific on where we put our units. We have partnered with a company which overlaps demographics, census data and competitors and identifies opportunities in that area and where the opportunities are. The last handful of stores that we have opened have seen the benefits of this.”
Taste shares slid 6.76 percent to R3.31 yesterday. - Business Report