LA-based PizzaRev: ‘Every meal is an event’
In the first installment of its new Case Study series, CSA Online offered an insider’s look at the conception and initial rollout of the southern Calif.-based fast-casual concept PizzaRev. Likened to “the Chipotle of pizza,” this innovative chain lets customers choose from an artisanal array of toppings to craft their own pizzas. Using a 900-degree, stone-hearth oven, pizzas are ready in about three minutes, all at a cost of less than $8 per pie. As noted in the first installment of the series, PizzaRev got its start in April 2012 with a test kitchen in Northridge, Calif., and opened a second location in Studio City just five months later.
In Part Two of our series, PizzaRev’s senior management team and Exclusive Broker and X Team International Partner Bob Haas bring readers up to speed on the latest developments in the story. These include the November 2012 opening of PizzaRev’s third location near the Westfield Topanga Mall in Woodland Hills, and ongoing plans for a fourth location slated in El Segundo, Calif. PizzaRev Partner and Co-CEO Irv Zuckerman also talks candidly about the need to be adaptable and open-minded amid some of the challenges of today’s retail marketplace, not the least of which is the fierce competition for best-in-class real estate in Southern California.
Quick Facts about PizzaRev:
What: Fast-casual, “craft your own” artisanal pizza restaurant
Who: Partners and Co-CEOs Rodney Eckerman and Irv Zuckerman, partner and COO Nicholas Eckerman, partner and CMO Jeff Zuckerman, exclusive broker Bob Haas, X Team International partner and co-founder of L.A.-based Cypress Retail Group
Current number of stores: 3
Average size: Two prototypes, 1,700 sq. ft. to 2,000 sq. ft. and 2,500 sq. ft. to 2,800 sq. ft.
In densely packed southern Calif., expanding retailers and restaurants often have to make a few compromises before they can find a fit in an ideally located shopping center. But back in November when L.A.-based PizzaRev opened its third location — a 2,000-plus-sq.-ft. space near the Westfield Topanga Mall in Woodland Hills — the footprint, co-tenancy, traffic counts and other demos were exactly what the management team had been looking for.
This was not easy to accomplish in an environment where the mantra “location, location, location” is once-again ubiquitous among savvy retail chains, according to PizzaRev Partner and Co-CEO Irv Zuckerman. Sometimes the race for space means that good prospects turn into false starts: Maybe the city refuses to let the operator rezone a former retail space into a restaurant, for example, or further analysis creates questions about ingress and egress or parking probems at what might otherwise be a nice spot for a new store. “The economic environment has noticeably improved in southern Calif., with more retailers and restaurants being willing to roll the dice and take a chance,” Zuckerman said. “This is naturally translating into some tough competition for truly class-‘A’ space. Unless you’re erecting your own building from scratch, in other words, it’s very rare to get exactly what you want.”
In the case of Woodland Hills, PizzaRev’s management team was therefore willing to take a smaller-than-desired space in order to gain access to a market brimming with target customers. Thanks to a hunch by Partner and Co-CEO Rodney Eckerman, however, no such compromise was necessary. “Rodney noticed that the tenant next to us in the center had a large amount of space,” Zuckerman explained. “This tenant does very well. But Rodney thought that it wouldn’t hurt to go and ask them if they would be interested in subleasing some of that space to us.”
After some negotiations with Pizza Rev’s exclusive broker Bob Haas, a member of the X Team International brokerage network and partner and co-founder of L.A.-based Cypress Retail Group, the adjacent tenant agreed to sublease an additional 320 square feet. “This added to our frontage visibility and allowed for some additional seating that will be a tremendous help,” Haas explained. “PizzaRev’s design team did a beautiful job of incorporating this additional space into the look and feel of the restaurant. It flows very nicely.”
The change happened late in the process — construction on the restaurant had already started — but rather than stick to the plan on paper, PizzaRev’s management team was as decisive as it was flexible. “What was really impressive to me was the speed with which Irv, Rodney and their team moved,” Haas said. “Once the deal was agreed upon and executed, their design team had approved plans from the city of Los Angeles literally the next day, and a permit to do the work within 24 hours thereafter. It’s a great example of how these guys operate.” Bear in mind PizzaRev opened its first restaurant in April 2012 and then opened second and third locations within seven months. “That is moving at lightning speed,” Haas added.
Both Zuckerman and Eckerman started their careers in the entertainment business and were Co-CEOs of a nationally known entertainment company. And to succeed in the entertainment sector, Zuckerman says, you have to be willing to go with your gut and adapt. “In promoting major concert events, you have to make decisions quickly. Your event is there and then it is over,” he said. “Feel is very important. So while our strategic plans are there, once we get a feel for something, we tend to go with it.”
To get that feel, PizzaRev’s team relies on all available sources of information — research, surveys, speaking directly to customers, chatting with neighboring tenants, and more. As the team works to grow its portfolio, it is relying on these various sources of feedback to make strategic tweaks to the original business model as needed. For example, while PizzaRev wants to give its customers maximum choice (in keeping with the slogan “craft your own”), the team has learned that certain customers appreciate help with the process.
“If you are looking at 30 possible toppings, it can be a bit overwhelming,” Zuckerman explained. “So we train our pizzaiolas to be ready to step in and, with a light touch, offer some help.” They might suggest a finishing sauce or explain the difference between andouille and fennel sausage. “This has streamlined and sped up the process, which is important. We are big on pressing the learning curve to create even more satisfied customers, one customer at a time.”
Toward that end, the team has become laser-focused on employee training. “When we open a new restaurant, we make sure all of our new employees have worked at least a week or two at an existing store,” Zuckerman explained. “That way, when that new store opens, customers can see that this isn’t our first rodeo.” PizzaRev has also made other tweaks that have improved traffic flow.
Based on PizzaRev’s high Yelp! ratings and strong sales, this adaptable approach is working. “Anyone who has ever been with me to their restaurant for the first time has been blown away by the experience,” Haas said. “You never hear a negative comment. The quality, the speed, the value — it’s a fantastic combination.”
Moving forward, Haas and the management team are continuing to look for best-in-class real estate in SoCal, and to ask hard questions about any prospective location. “We don’t jump into something because it is either inexpensive or because it was a restaurant at one point and there is some kind of economy of scale,” Zuckerman said. “With Bob and his partners’ help, we are being extremely careful and diligent about the research that needs to be done, whether you’re talking about customer counts at nearby facilities or analyses of the traffic patterns in the surrounding area.”
Just as finding the right arena can be the key to creating a great concert experience, the store location can be critical to the experience of eating at PizzaRev. “In a way, every meal is an event for the customer,” Zuckerman explained. “Our job is to make sure the ‘event’ is the best experience it can be for our customers.”
To follow the story of PizzaRev, please stay tuned to ChainStoreAge.com and click here for past case study entries.
Pizzas are ready in 3 minutes? Kudos to PizzaRev. Their concept of employee training is also very unique. Thanks for the Article.
Christmas sales soft at Target
Weaker than expected December sales at Target will cause fourth quarter profits to come in at the low end of an earlier forecast, the company said.
Sales at Target for the five week period ended December 31, increased 0.8% to $10.2 billion while same store sales were essentially flat, below the company’s guidance which called for an increase in the low single digits. The performance was driven by a low single digit decrease in comparable store transactions, offset by an increase in average transaction size.
"December sales were slightly below our expectations, as strong results late in the month did not completely offset softness in the first three weeks," said Target chairman, president and CEO Gregg Steinhafel. "Similar to November, profitability for December benefited from our continued focus on achieving an appropriate balance between price investments and driving sales, combined with thoughtful inventory management. As a result, we expect Target’s fourth quarter 2012 earnings per share will meet or somewhat exceed the low end of our prior guidance."
Target previously indicated it expects adjusted earnings per share in the fourth quarter to range from $1.64 to $1.74, or $1.45 to $1.55 if expenses related to the company’s 2013 entry into Canada are included.
December’s showing was against a relatively modest prior year increase of 1.6% and marked the second consecutive month that Target has missed its same store sale forecast. In November, the company reported a 1% decline in same store sales that was well below a forecast for a low single digit gain. At that time, Steinhafel assured investors that December comps would be in the low single digits and the company had the right plans in place to deliver seasonal results.
A key aspect of December’s weakness appeared to be weak sell through of the Target/Neiman Marcus Holiday Collection. The unique assortment of exclusive and pricy merchandise did not appear to resonate with customers, judging from 70% markdowns evident at some location where inventory levels remain disturbingly high.
Looking ahead to January, Steinhafel said he expect a low single digit same store sales increase for the comparable four week period. Speaking more broadly about 2013, he noted, "we will continue to focus on profitably growing Target’s market share by combining unique merchandise, convenience, value and an unbeatable guest experience across our stores, online and mobile channels."
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Butterball gobbles up pork producer
GARNER, N.C. — Butterball has moved to diversify its product portfolio with the acquisition of family-owned and operated Gusto Packing Co., located in Montgomery, Ill.
Gusto Packing Co. offers six basic product lines: Hickory & Apple Wood Smoked Bacon, Bone-In Smoked Pork & Turkey Products, Smoked Boneless Hams, Cooked Hams, Pork & Turkey Deli Meats and Spiral Sliced Hams.
"We are pleased to welcome the Gusto team to the Butterball family and look forward to working closely together," said Rod Brenneman, CEO of Butterball. "With Gusto’s 260,000-sq.-ft. facility, we are adding approximately 325 million pounds of further processed capacity to our operations. This additional capacity allows us to support Butterball branded geographic expansion and achieve greater account penetration within current markets. It also affords us the ability to develop and manufacture innovative products for the Butterball brand."
"The Butterball brand remains intensely focused on its core product offering, which is turkey. The acquisition provides Gusto with the opportunity to benefit from a national logistics and distribution network and further enhance quality and food safety initiatives," added Brenneman.
The Gusto Packing Co. leadership team as well as approximately 500 employees are expected to remain in their current positions.
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