Growth Strategy: Playing Both Sides
Peter Piper redefines its pizza-and-games concept as fun for all ages as it prepares to expand beyond its core market.
By Donna Hood Crecca, Contributing Editor -- Chain Leader, 2/1/2006
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A television commercial shows a smiling mother approaching the table with a fresh, hot pizza, only to be surprised to sit down on a whoopee cushion. The voiceover asserts, “The food’s as good as the fun!”
The spot sums up the new brand positioning for Scottsdale, Ariz.-based Peter Piper Pizza, which has 136 locations in five Southwestern states. “The goal is to be known as the restaurant people of all ages look to for a magical experience of great tasting food, fun, family and friends,” says President and CEO Frank Sbordone.
But Sbordone is well aware that national expansion is not just fun and games, and is eager to demonstrate the 33-year-old pizza-and-gaming concept is not just for kids.
Changes to the menu, entertainment offering and marketing campaign are designed to differentiate the concept from competitiors with fun-for-all appeal.
Grown-Ups Welcome
Research revealed that Peter Piper customers come in three varieties—families with children, groups such as sports teams, and adults without children—and that patrons stay an average of 90 minutes. So the company embarked on a mission called “90 Minutes of Magic,” to deliver quality, service and value.
A prototype unveiled in 2002 features three seating options: a quieter, more subdued section with booths and TVs showing sporting events for adults; an area with tables and chairs geared toward family dining; and larger tables and bench seating for groups and parties.
The gaming area features redemption, sports, interactive and video games, as well as children’s rides and a play area; guests can redeem tickets for prizes.
Tile floors, warm colors, pendant lights above tables, brickwork and wood accents provide a contemporary feel. At 10,000 square feet, the new locations seat 375 to 400. Twenty-two new stores follow the prototype, and 60 percent of existing units have been remodeled.
Peter Piper also worked toward improving the menu. “Operation Rolling out the Dough,” for example, refocuses employee attention on adhering to specs and procedures when preparing the dough.
“Pizza is our core product, so we need to ensure employees know the specs,” says Laurie Katapski, vice president of marketing. “The gaming association makes people think the pizza will taste like cardboard. But we make our dough fresh daily at each location, use a special sauce and 100 percent mozzarella.”
Don Henry, formerly of Chi-Chi’s and Koo Koo Roo, joined Peter Piper as director of food and beverage in 2004. He has introduced menu items and ingredient enhancements to please the palates of young and old alike. The company launched Garlic Cheese Bread, $4.29, in 2004, followed by two entree salads—Chicken Caesar and Italian Chef, $4.49—and the popular Cinnamon Crunch Dessert, $2.99. It rolled out a Caramel Cinnamon Crunch Dessert in October.
“Our goal is to make sure people know we’re more than just cheese pizza and to drive them into the restaurants as much for the food as for the games,” Katapski says.
Play to Win
To maximize its game investment, Peter Piper moved from a vendor-share arrangement to full ownership of all game units at the 39 company stores in the past three years. It hired 18 additional technical managers, so each unit now has someone on site to maintain and service games. The company also purchased nearly 500 new games to keep the mix up to date.
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“This investment gives us control over the entire operation. We can service the game area without having to call for the vendor to come; we’re able to keep all games in consistent operation,” explains CFO Tim Flynn. “Now the manager can manage the entire restaurant, which speaks to delivering on guest service.”
Peter Piper also instituted a monthly maintenance schedule. “That way we find the problems before the guest does,” says Vice President of Entertainment Steve Thomas, who joined Peter Piper in 2004; he served as director of technical services at Showbiz Pizza and vice president of amusements for Jillian’s.
Games account for 26 percent of sales, while food and beverage generates 74 percent. Food and beverage transactions average $19 per party, plus an additional $8 on games. “Our entertainment revenues are now higher because we own the games. The added personnel cost is offset somewhat by better in-service rates and guest-service levels, but on a gross basis, we expect the ratio to remain consistent,” notes Flynn.
Many franchisees are also buying games and training technicians, all with Thomas’ assistance. And they’re modeling other corporate initiatives such as a game database that tracks guest usage.
Balanced Branding
To communicate the changes at Peter Piper, new TV ads and a redesigned Web site debuted in mid-2004. At the same time, the company took on sponsorship of the Phoenix Suns and Arizona Diamondbacks.
The eight television commercials convey the “total family experience,” according to Katapski. In addition to the whoopee cushion spot, scenarios include a coach with team members, a father and son, and other group and family situations.
“We strive to balance the food focus with the gaming focus in our campaign. A syndicated study shows that the campaign is driving increases in brand awareness and food-attribute awareness,” Katapski says.
This multipronged strategy is driving results overall. System-wide sales reached $154 million in 2004, a 10 percent increase over 2003, according to Chicago-based industry analyst Technomic. Peter Piper ended 2005 at $171 million. The company says average unit sales are $1.3 million, up from $1.2 million in 2003.
Twelve Peter Pipers opened in 2005, and 14 units will open in 2006 and 23 in 2007. With 96 of its 136 restaurants franchised, Peter Piper will grow primarily through franchise develoment, with two or three franchised units for every company unit. The chain will expand beyond its Southwest core market by mid-2006, says Sbordone, who is talking with potential operators in Florida, Illinois and the Northeast.
“There is room for a national chain like Peter Piper,” observes Darren Tristano, managing director at Technomic. “Chuck E. Cheese’s and Dave and Buster’s certainly show that Americans like entertaining themselves with games, and they each hit a certain demographic. What Peter Piper hits upon is that you almost have to appeal to all different age groups to grow today, and they’re having good growth.”
Peter Piper plans to keep that momentum going. “The goal is to be national, but to do it slowly and make the right decisions on where to go,” Katapski says. “Our approach is to be methodical yet aggressive enough to impact the business.”
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