The pizza economy

A few years ago a friend of mine ended up acquiring a small pizza restaurant when a family member that owned it was no longer able to run the business. They do only carry-out and delivery. There's no place to sit and dine in the establishment. It's a single store, not a franchise or part of a chain.

Not far from my friend's establishment is a Pizza Hut, a Little Caesar's, a Papa Murphy's, a Papa John's, and two grocery stores that sell a variety of pizzas. One of these stores has a fast food counter that serves personal size pizza made to order. Even the nearby 7-11 offers hot pizza. In other words, my friend's pizza joint has plenty of competition.

About four years ago a pizza buffet restaurant opened in the same complex as my friend's business. When I recently asked him how that had impacted his business, he replied that as far as he could tell, it had made no difference whatsoever. Business hadn't just stayed steady, it had grown at about the same rate it had been growing before the buffet place opened.

When I expressed my dismay at this response, my friend explained that his restaurant and the buffet place offer two very different experiences. "You can go there, sit down, and immediately start eating a variety of pizzas. But, quite frankly, their pizza isn't that great. It's not bad. But it's not great pizza. If you want good pizza you go to a place like ours. Also, there are also plenty of people that prefer to dine at home, rather than battling the crowds at the buffet counter."

Home delivery, my friend explained, is a large part of his business. You don't get that from the buffet place, Little Caesar's, Papa Murphy's, the convenience stores, or the grocery stores. His store has a lot of loyal customers that use home delivery service frequently. I assume it's much the same for the nearby Pizza Hut and Papa John's establishments.

This got me thinking about the different experiences offered by the various pizza purveyors in the area. Papa Murphy's offers fresh pizza that you can bake at home at your leisure. You can get prepackaged ready-to-bake fresh pizzas at some grocery stores, but Papa Murphy's makes pizzas to order. This model only works well if you only need one or two pizzas, or if you have lots of ovens for more pizzas. Otherwise you've got hungry mouths waiting for pizzas that are still in the oven after the first ones have been devoured.

Among the pizza restaurants near my friend's place, only one—the buffet joint—offers a sit-down dining experience. I remember when most Pizza Huts were sit-down places before they shifted to the carry-out/delivery only model. I suppose this mix reflects the desires of consumers in the area.

It still seems odd to me that the suburban population near my friend's restaurant can support so many pizza institutions. My friend explained that pizza has wide appeal across demographic groups. It has relatively low cost per calorie for restaurant food. It keeps well, making for good leftovers and a low waste ratio. These factors make pizza a good option for a number of situations: people on a budget, families, parties, etc. He assured me that we will see fewer pizza offerings when pizza declines in popularity in some future day.

This whole conversation intrigued me. I don't want to pursue the restaurant business. But it is interesting to learn a few tidbits about how the restaurant economy functions. Another point of interest to me is that pizza is one of the very few foods that all members of our family will eat. Planning family meals drives my wife to despair, due to the conflicting wants and won'ts among our crew. This makes pizza an easy go-to food for family dining. As long as one pizza is cheese only. But that's another topic.