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Pizza and Food Prep Chains Beware, Here Comes Wal-Mart
Wal-Mart has begun looking at giving restaurants, particularly pizza and meal assembly chains, a run for their money. The huge retail chain that makes mincemeat out of its competitors has begun airing this video about how ordering a pizza, say from Domino's, could cost $14, but Wal-Mart's "Take and Bake" pizza costs only $8.
Peter Romeo, editor for Nation's Restaurant News, cautions the industry about the power of this retail giant in reaching out to yet another domain of franchised chains.
"Wal-Mart is trying a new concept called Marketside, which is positioning itself as the place to buy dinners a consumer might’ve otherwise purchased from a restaurant. Customers can pick up the ingredients to whip together a meal themselves. Or they can opt for one that’s ready to plate and serve the family. Indeed, 'easy meal solutions' is the cornerstone of the venture. Except here you can get them for what the nation’s notorious discounter coyly terms 'affordable prices.' "
"Be afraid. Be very afraid," Romeo warns the restaurant industry in his blog about these two developments.
Just like Papa Murphys
Papa Murphys is winning awards and opening stores all over. They are take and bake and people love them. What is the difference in WALMart doing this. They have better buying power to get the ingredients for less. They don't need to care if its good....they will still sell a ton. I agree-be very afraid!
The WalMart Attack
Yes, even Pizza is not sacred anymore. We own an Italian Restaurant, a former Pizzeria, and my 30+ son delivers pizza and knows pizza. He tried the WalMart Pizza and said it is very good. That scares me.
I want to see the label. How much sugar?? How many chemicals and preservatives?? What kinds of "fats" are used?? How fresh is it??
How much dough, meat, vegetables, sauce in proportions?? In essence, what are people buying??
The commercial might be true, and gives a false impression when it states your savings. Your time and oven use need to be considered, but they worked right around that. They are sneaky, and really are competition.
Speaking as an avid pizza eater,
we pizza eaters don't give a tinker's damn about nutitional information. If pizza eaters cared about nutritional information, they would look like Cappucino sipping arugula munchers--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
The responses to this thread
The responses to this thread are interesting. I retain minor interest in a pizza shop I started decades ago. However I know who our customers are. They do appreciate quality. That being said, in the thin crust, Palermos creates a frozen product that can easily rival even high end in that category, relatively expensive frozen pizza though it is. As I mentioned, I know my customers and I know that 17% of our business is repeat customer's who buy pizza when they are time constrained. Of that 17% around 73% have been shopping. What is of interest to me is of that 73% of the 17% I would estimate (as I have never asked the question) that around 80% is the type of shopping that could be accomplished at a SuperWalmart. My thought is, if they can approach Palmeros in quality they are directly targeting around 9% of my customer base. More over they can deliver a superior value proposition by offering the add ons of the entire gamut of economical soft drinks their superstores allow for. Given that, my 9% would be at risk, I find it interesting that others so casually disregard the potential inroad.
FuwaFuwaUsagi
"Never underestimate the power of stupid people in large numbers."
Missing the Point Here
The Walmart deal is a take and bake, which will leave the ordinary consumer who lacks the appropriate pizza oven with something like frozen pizza.
I don't get the attraction. Unless, it is a loss leader for Walmart.
Even crummy pizza chains have decent pizza ovens, which is critical. I go to Walmart, buy the take and bake, and essentially warm it up at 425F?
Missing the point here.
Michael Webster PhD LLB
Franchise News
Michael writes; The Walmart
Michael writes;
The Walmart deal is a take and bake, which will leave the ordinary consumer who lacks the appropriate pizza oven with something like frozen pizza.
My reply:
Point one:
Some of the rising crust pizzas are very comprable to many chains, even in a home oven. And the specialty brand I mentioned works fine in an oven at 425.
Point two:
The convienence factor. I already gave you the numbers from our shop. All they need to do is peel off the busy soccer mom who runs into Walmart to stock up on toilet paper and grab some milk, in between running to the dry cleaners and picking little Lacey from her soccer lesson. Does Soccer Mom really want to whip out her cell phone an order a pizza and make yet another stop and have potentially cold pizza after she picks up lacey and drives home, or does that $9 Walmart take and bake suddenly look good? Oh, and she can pick up a bag of salad mix and a 6 pack of Sam's cola to round out the meal economically.
Point three:
You are a Canadian, You still have developed taste buds. You still demand fruits that have flavor. Down here, people eat at McDonalds 3 times a week.
FuwaFuwaUsagi
Pizza chains beware, here comes WalMart
Don't kid yourself... WalMart can and will eat your lunch (or dinner, depending on the time) thanks to their builk and the fact that 69% of Americans step into their stores each week.
If they simply take 5% of your business, that's nearly all your profit... Romeo is right... "Be afraid. Be very afraid."
Spot on that...
I was involved in several alternative distribution channel cases. In every one there was a substantial impact when what had been considered specialty items in the sense that people would go to a specialty shop to buy it, were suddenly given to chain distribution.
The chain distribution means all of a sudden the customer doesn't have to make a special stop to get the product. It can be included in a general shopping trip.
Considering WalMart's impact on retailing everywhere, I would expect the same impact on things like pizza/other food offerings.
Discounting the WalMart customer is certainly a big mistake. Here in Texas. it is considered very good sense to shop where your money stretches the farthest. We shop WalMart at least twice a week. Except for high grade fine beef, their meat dept is as good as any super market in Houston.--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Walmart type customer is not our customer anyway
As an upper end pizza shop, we really don't care about the lower end Walmart shopper that is going to drive miles to pick up a "no better than frozen" pizza and ruin it further in their own $500 oven.
Save your time and money...
Cici's and Walmart can now serve the same low end crap to their low end customers, and we will continue to keep our higher end customers.
It bears watching but...
I'll really start to worry when WalMart sells them the $25 000 oven needed to get the result our customers expect
Walmart competes with fast food outlets
Be aware the Pizza is great! Just had a sample slice at our local walmart. As good as SAMS CLUB pizza and I'll buy that :)
The Pizza is great?
"As good as SAMS" - thats the point! To be impressed by that you must be a Little Caesars patron
Pizza?
Pizza is not frozen, Pizza is not from Walmart or Sam club. That is processed reformed barf.
Real Pizza comes from the pizza shop that specializes in selling Pizza.
If you are going to waste money trying to do it yourself, buy a chef-boyardee kit and have at it.