Shakeout Forecast for Pizza Restaurants / Delivery Services Catching on in City Market

By Carter, Kim | THE JOURNAL RECORD, August 2, 1986 | Go to article overview

Shakeout Forecast for Pizza Restaurants / Delivery Services Catching on in City Market


Carter, Kim, THE JOURNAL RECORD


Competition in the Oklahoma City pizza restaurant market is becoming heated, and though restaurant operators believe i ts big enough for everybody now, some say a shakeout may be expected sometime in the next few years.

Fast and free delivery took longer to catch on in Oklahoma City but now that the public is more aware and convenience is a top priority, chains and independent pizza restaurateurs are taking advantage.

Even though there is a lot of competition in the market, there are also a lot of alternatives. A person can sit down, drink a beer, eat a pizza and salad or he can drive to Little Caesars and save money by purchasing two pizzas for the price of one. Or for the person who wants to stay at home with his video cassette player and doesn't mind paying a little extra, the pizza can be delivered to his doorstep.

There are so many alternatives, that even in areas where there is a Domino's, Little Caesar's and Mazzio's at the same intersection, the operators don't feel they are competiting against each otherbecause each is going after a different market.

The most recent infiltration in the Oklahoma City market is DePizza Inc., based in Memphis, specializing in delivery that came in a whirlwind, opening 12 stores in 30 days.

The fast pace set by DePizza left other chains in a daze of wonderment, but at this point none feel too threatened. However, some pizza companies are considering the possibility of a shakeout in the future and planning for it.

- Sammy's Pizza is planning to franchise in order to add new restaurants and build a network to compete against the larger chains. The local independent chain is currently building its 12th restaurant in the Oklahoma City metropolitan area.

- With five restaurants already in place in Oklahoma City, the Domino's franchise is building its sixth store.

- Magnum Foods, the Little Caesar's franchise for the area, expects to have 26 pizza restaurants in Oklahoma City before the end of the year.

Media used in marketing by each type of establishment varies depending on the type of service offered.

According to a recent study conducted by Ken's Restaurant Service its Scooter's Pizza Delivery operation, delivery operations going after the 12 to 24 age market are depending heavily on radio advertisement to attract customers. Research has shown that age group is most apt to order pizza delivery, more willing to pay the price than an older market and can best be reached by radio, said Gail Rhodes of Rhodesway Advertising Consultants of Oklahoma City.

Television is a more effective use for pizza operators going after the 18 to 49 age group.

DePizza moved into the market because of Oklahoma City's standing in the restaurant industry.

Susie Simon, vice president of marketing, said the company referred to a September 1985 Restaurant Business Magazine study rating the top 100 markets in various categories of the industry.

"Oklahoma ranked number three in per capita sales," Simon said, "and was in the top 25 in the overall fast food market."

"Pizza is a high value, economical portion of the restaurant business. It cuts across a lot of income levels," she said.

DePizza opened its first store in Oklahoma City May 12 and opened its 12th store on June 25. Simon explained moving fast is part of the pizza chain's development strategy.

"We like to come into a market as quickly as possible so we can get operating efficiencies and advertise to a full market," Simon said. DePizza has more stores in Oklahoma City than in any other market.

Pizza restaurant operators agree that most likely there will be a shakeout in the industry at some point in time.

"The delivery and take-out segment of the restaurant business is probably one of highest growth potential," Simon said. "There will be a lot of people who'll enter the market and it will cause a shakeout at some point in time. …

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