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Peppes Pizza has been at the forefront of chain building on the Norwegian pizza market for a number of years, but aggressive new players such as Dominoes and Baker Pizza then challenged hegemony.
The last two years have been characterized by price pressure and many new start-ups from all three channels.
Last year, Peppes, owned by Jens Ulltveit-Moe, however managed to increase sales by 2.3% and now reaches half a billion crowns after a few years of hardship. Profit more than doubled from 18 million to 39 million NOK.
Sverre Helno, CEO of the company, welcomes the negative spiral of the chain.
– We are now witnessing the results of a tremendous flipping operation. We saw that the pizzas war was going on. The Peppesgangen have mobilized across the country, says Helno.
Peppes has taken special measures for takeaway delivery and home delivery, which represents the strongest growth.
Helno thinks that a price cut is largely the reason why Peppes is now taking new measures.
– While we have captured the most new competitors in the take-away and home delivery sectors, this is where we are doing best and growing the most. The main reason is the fall in prices in 2016, when we sharply reduced prices.
Over the next few years, they gradually realized that lower prices had also had an impact on profitability. He also thinks that the digital strategy with the introduction of a new order application has had a positive effect.
The battle for the throne of pizza
Helno notes that he has spent a lot of things on the pizza market in a short time. In Oslo, in Ring 1, 30 restaurants offer home deliveries.
The newcomer Domino had great ambitions to establish new outlets, but struggled to endure a total operating loss of 130 million over four years.
– We find that Dominos has aimed to open many places, but we do not know when.
Peppes is now fighting to make Pizza Baker the biggest pizza chain in Norway. The Sandnes-based pizzeria has the largest number of outlets and has a total turnover of NOK 1.1 billion.
Peppes Pizza has also achieved a total business figure of $ 1.1 billion if one includes franchises and sales in grocery stores.
The Peppes franchise concept has been expanded in recent years. 45 of the 74 departments of Peppes are managed by franchisees. Last year sales of chain franchises amounted to NOK 353 million.
– Our franchise concept works well and gets a good answer. We are finding that new restaurants are quickly becoming profitable in both big cities and small towns. It is gratifying to see how our franchise restaurants manage to create strong local entities in a context of very difficult competition. It is very important for us to succeed, says Peppes chief Espen Hoff.
Included freezer counters
Earlier this year, Peppes introduced its own ready-to-use pizza, which is sold in grocery stores thanks to a long collaboration with the Norwegian food giant Scandza.
The goal was to compete with Orkla, which holds significant market shares with brands such as Grandiosa and BigOne.
One of Peppes' variants has entered the top three after a short stint on the market.
– In general, we can say that we had a very good start in the frozen pizza, in addition to the Woodworking series Peppes has further progressed. That's why we have strengthened our position in the grocery sector, Hoff said. (Conditions)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which links directly to our pages. The copy or any other use of all or part of the content may only be made with written permission or as permitted by law. For other words, see here.
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