Domino’s rival Pizza Hut aims to double stores to 500

Pizza Hut Australia is owned by private equity group Allegro Funds, which in mid-2021 launched retailer Best & Less on ASX.

Pizza Hut sells approximately 350,000 pizzas per week, with most of its outlets operating in smaller sites of around 80 square meters. Only 12 of the 260 outlets are traditional “red roof” style eateries that were popular in the 1980s and 1990s using a now-discontinued “all-you-can-eat” model.

Shifting to a delivery model for Pizza Hut meant venues did not need to be located on prime shopping streets. “We don’t need to have them on prime real estate,” he said. The group is using digital technology and analytics to make the business much more efficient and has reduced the average delivery time from 49 minutes to 31 minutes.

Mr Reed said the group will open 45 more stores in 2022 and has a “pipeline” of 100 new stores in total in its plans. It aims to operate around 500 outlets in Australia in four years and envisions more than 750 over an extended period.

“We will have between 750 and 800 stores in Australia,” he said.

When he arrived in the company, the main goal was to redesign operations. “It was first and foremost an operational recovery.

Mr Reed said the pandemic and the structural shift towards home consumption had been a bonus, but the group’s trajectory had already risen sharply. “COVID blockades. It was an accelerator.

Comparable store sales, which exclude the effect of any new store openings, increased 13.7% in the 12 months ended October 31.

He said Pizza Hut Australia was on track to hit $ 240 million in revenue for the 12 months ending December 31, down from around $ 190 million a year earlier.

Allegro Funds purchased Pizza Hut’s Australian master franchise in late 2016. It works closely with Pizza Hut’s global parent company, Yum! Brands.

Mr Reed said the Pizza Hut business in Australia is well protected from inflationary pressures on raw materials through long-term contracts with its parent company that run for the next two and a half years. “We are in a position where it is locked. “

He said 80% of sales came from Pizza Hut’s five best-selling pizzas. The first two are Super Supreme and Pepperoni.

The 260 existing stores cover only about 55% of the population, and using technology and analysis, Pizza Hut has identified over 340 “shopping areas” where a point of sale could be set up.

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