[T2DMan]

Pizza Hutt Gourmet Pizza hit the New Zealand market - Hell for Hell? Bring it on!

Pizza Hut tackles gourmet market

04 July 2005 By ADRIAN BATHGATE

Pizza Hut is today launching a gourmet range of pizzas that it hopes will give it the edge over rival Domino's as competition in the sector hots up.


But New Zealand's biggest pizza chain denies it is trying to counter the massive rise in popularity of Wellington-based Hell Pizza.

Pizza Hut general manager Russel Creedy said the gourmet range was being introduced to try to pick up a wider range of customers. "It's not a Hell strategy at all, it's something we've developed over the last three years in limited promotions.

"Hell's a pretty niche market, chasing after a certain profile (of customer). We don't want to be that specific."

Hell Pizza, which operates only in the gourmet market, is known for its youth-oriented marketing. But founder Callum Davies said Hell had a diverse client range, from students to "little old ladies".

"Most people recognise what we do is aimed at the lighter side. Pizza Hut are trying to be everything to everybody, taking on us at one end and Domino's at the other."

The success of Pizza Hut's one-off gourmet pizza promotions, which normally cost a couple of dollars more than an ordinary pizza, was behind the decision to make it a permanent addition, Mr Creedy said.

Its gourmet range was first launched in Hamilton earlier this year, and he said sales had been positive.

Mr Davies said Hell's sales in Hamilton had been unaffected since the launch.

Pizza Hut views its main rival as Australian chain Domino's. Since Domino's arrived in New Zealand two years ago, it has been known for aggressive pricing to undercut the competition.

Both Hell and Domino's have about 40 stores nationwide, and are aiming for more than 50 by the end of the year. In contrast, Pizza Hut has 102 stores, and Mr Creedy believes it will reach 110 by the end of the financial year next March.

Domino's New Zealand manager, Peter Jones, said national sales were moving ahead, especially in Domino's new markets of Auckland and Christchurch.

Mr Creedy said Wellington, which was the first market Domino's attacked in New Zealand, had settled down after a "fractured" couple of years. "It's become extremely profitable for us."

Pizza Hut is owned by Restaurant Brands, currently the subject of a $1.65-a-share takeover bid by Australian private equity firm CVC. Its shares closed on Friday at $1.63.

In its annual result for the year to March, Restaurant Brands said overall sales grew 7.7 per cent to $87.6 million. However, same-store sales dropped slightly for the year, but Mr Creedy said that since March same-store sales had been positive. The same-store drop was because of opening new stores near to existing ones, and "cannibalising" its own market.

Domino's, which recently floated on the Australian Stock Exchange, had A$5.4 million (NZ$5.9 million) of sales in the year to June 2004. It estimates it will make $A7.7 million in the year to June 2005.