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Re: [sharechat] Dominos/Pizza Hut competition

From: "Karyn W" <>
Date: Wed, 10 Dec 2003 05:56:17 +0000

Well, here's the eyes and ears from Melbourne, Vic where RBD have 51 
outlets.  In my view, this company must be going down the toilet, dragged 
down just like most NZ companies who bought up a dying Australian business 
only to find out it was for sale for a good reason.    Why?

1.  Pizza is the number one takeaway food in Australia.  While you might 
think this is good for RBD (big market, high sales volumes, etc), don't be 
fooled.  Australians are pizza connoisseurs - meaning they can tell a good 
one from a bad one.  And trust me - Pizza Hut pizzas here are simply 
terrible!  I ordered some a few months ago, and will never order them again. 
  One was so bad I couldnt even eat it.  The base of it was so thin and 
soggy you couldnt even hold it up to eat it.  The topping was equally 
sparse.  Cost cuts = poor quality products!

2.  Competition is fierce.  In my drawer I have brochures from over 20 
different pizza outlets in the area that will deliver a pizza to my door - 
for free.  There are simply millions of little restaurants and cafes in 
Australian suburbs, all delivering a variety of takeaway foods to the home.  
I could order in every night for over a month, and still not get through all 
my local restaurants that home deliver.

3.  Back to the connoisseur thing again.  All pizza outlets do "gourmet" 
pizzas, and these are usually their most popular product.  Pizza Hut tried 
to introduce a new "gourmet" range here, but it flopped (they blame this 
promotion for their recent poor figures).  The truth is that they simply 
cannot compete with a local outlet who uses fresh and specialised produce to 
make great pizzas.  Most people would prefer to order a great pizza and pay 
$5 extra, than a crap one that they cant even eat.

According to a recent (Australian) media report - "sales from Australian 
stores open at least 12 months fell 4 per cent, the company said - better 
than a 5 per cent fall in the fourth quarter and a 14 per cent drop in the 
third quarter, it said".

What a surprise!  Not.

Pizza Hut has 90 NZ stores. It has 51 Australian stores - thats over one 
third of the business losing customers, losing sales, losing money.  How 
long before another Air NZ/Ansett?


PS.  The Warehouse is in even more dire straights over here.  Let me know if 
you want an overview of the discount retailing market in Australia and why 
the Warehouse is equally doomed :-)

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