New competition effect question

[The_Calzone_Kid]

Hello all,

Its been ages since I’ve posted anything - I hope all is well for everyone!

I had a new pizza chain (Marcos Pizza) open up about 1 block from me during the 1st week of October. This brings the number of pizza delivery restaurants to 6 in a town of about 35k. 4 of them, including Marcos, are chains, 2 are indie. I’m mainly delco with <5% dine-in.

I’m very surprised with how successful they are right out of the gate. Their 1st 2 weeks in business, I was about even from the previous year. Their 2nd 2 weeks, I was down about 8%. But the last 2 weeks I’m pushing a 20% decline from last year. So its not trending the right direction obviously! I’m a little surprised but haven’t had any new competition until now. I’m coming off a great summer into September. Also, I found their pizza to be very average.

So basically, how long would you think it takes for their newness to peak? And does it seem normal for me to be dropping off farther 6 weeks after they open? Or does anyone have any cool ideas to slow their steam?

Thanks!
TCK

 

[clownhair]

I am not sure how it will play out for you, but I can relate with my experience when a little caesars opened in our town. Our town only has about 6-7k people in a 5 mile radius. When Little Caesars opened the drop in sales was almost immediate. Our sales dropped close to 50% during the beginning of them opening there doors. Once the initial sales drop occurred we did not see any additional loss of sales over time. It took a few months but sales did start to climb again. After approximately a year we had recovered to about 80% of pre little caesars sales. It has been 2 years now since they opened and we are still around this level and I do not think we will ever pull back to where we were.

 

[Kamron_Karington]

New competition will certainly focus your attention. And one thing’s for sure… whoever said “competition is good for business” wasn’t a small business owner…

If you go to: http://link.repeatreturns.com/?G81SU372

…Just scroll down a little and you’ll see my “Competitor Attack” article… might be helpful… give you some ideas…

 

[pizzapiratespp]

I’m dealing with the same thing at 1 of our 3 locations. In addition to all the regulars, Dominos, Hut, Papa’s and all the indies we now have a total of 6, $5 large pizza shops within a mile of us. The newest one is running $3 larges for the grand opening. While our other stores are showing 10% to 12% increases, this store is flatlining at about a 1% increase. Its just a sit a wait situation at this point cause I’m not selling $3 large pizzas. On top of that the Dominos and Papa Johns are always changing ownership and as soon as a new owner takes over they flood the market with deals. Then a year later they are sold to a new guy.
I need some serious pizza shop closures in this area.

David

 

[eatmorepizzanc]

Same thing here…Papa John’s came in to town - right across the street from one of our stores. When they first opened, it was pitiful, like an invasion of aliens - we watched their delivery cars driving up and down our street all night long while our phones remained mostly silent. Then their guys were on foot delivering cups, flyers, magnets etc to MY customers. But you know what? After venting here on PMQ, we got some great thoughts and here is what we did - first, we invested in shiny new car toppers, then we went to Mail Shark and have colorful, beautiful menus made up to mail out to all local homes and businesses. Then we created some new specials, then we drove by the dancing pizza dude, and blew our horn as loud as we could that he fell per into a mud puddle and ruined his stupid costume (not really, but our loud horn did startle the hell out of him). My point is this: there is nothing special that these chains do that you can’t do - including renting a stupid pizza costume and dancing like an idiot. Our sales are still off by 20-30% but not the 50% that they were. That’s the reality of new competition I suppose. Let the challenge force you to take a good hard look at your own practices and maybe consider areas where you can improve like we did!