Supermarket delis are topping their pizzas with pizzazz. They're pushing upscale selections and upgrading their ovens to stay competitive with pizzerias.
As a category, pizza delivered a nice boost in sales for supermarket delis in 2003. Random-weight pizza sales increased 44.5% to $56.9 million for the year ending Feb. 22, 2004, according to data from FreshLook Marketing Group, Hoffman Estates, Ill.
Penn Traffic is currently adding brick ovens to many of its stores. The ones that already have brick ovens offer everything from made-to-order pizzas to individual slices, said Marc Jampole, spokesman for the 109-store chain, based in Syracuse, N.Y.
"We also sell just-assembled pizzas that haven't been cooked. In other supermarkets in our chain, we just offer frozen pizza," he said. "The pizza that comes out of our brick ovens tastes just as good as the pizza at any pizza place. They sell very well, especially during lunch and dinner."
From time to time, the chain also cross promotes other items like soda and chips, creating meal deals akin to restaurant offers. In fact, offering a complete meal can give supermarkets a competitive edge over casual pizza eateries that only have a limited number of items to "throw in" with each order, said Diane Garber, president, In-Sight Communications, Buffalo Grove, Ill.
"On Fridays, Dominick's Fresh stores in Chicago are competing with QSRs and fast-food operators by offering 16-inch pizzas for $4.99, and often cross promoting them with a 2-liter of pop for 99 cents," she said. "The stores are equipped with on-site pizza ovens. During the daytime, along with generic, quick-serve lunches, they offer individually packaged slices."
A division of Albertsons, Jewel-Osco promotes Chicago's own Uno's refrigerated pizza once a week, she added. Both chains display stand-alone, easel-style signs inside their entrances to attract shoppers near the deli department.
"Shoppers can swing into the deli, place an order for a pizza, and when they're done shopping, their pizzas are ready," said Garber.
Many supermarkets are also promoting several different pizza brands and varieties in the same circular, she said. "Instead of just having one brand of pizza on sale, grocers are promoting an in-house brand next to a national brand, and even different types of pizza like a thin-crust, self-rising crust and a deluxe pizza, all at the same time," she said. "Consumers have very distinct taste profiles when it comes to pizza. By promoting more than just one, grocers are capturing a larger share of shoppers at one time."
Wild Oats Markets, Boulder, Colo., uses organic ingredients to promote a healthier choice compared to the standard pizza that is packed with processed pepperoni, cheese, sauce and other not-so-good-for-you items. The natural food chain features deli-style, take-and-bake pizzas that are assembled, but not cooked, selling a high volume of these to shoppers who are on their way home from work.
The chain also offers pre-ordered pizzas that are cooked in-store, as well as organic pizza by the slice that is available in five different varieties.
"Not necessarily to compete with takeout companies, but to differentiate Wild Oats and to support the mission of our company, many of the ingredients we use on our pizzas are organic," said Sonja Tuitele, spokeswoman. "We also use gourmet toppings and interesting combinations to differentiate our pizza from what is available elsewhere."
Two interesting offerings at Wild Oats include a Greek pizza made with Greek olives, feta cheese and red onions, and a Margherita pizza topped with fresh basil, fresh roma tomatoes and mozzarella cheese. The chain even has a kid's meal pizza, which comes in a smaller serving size, at a discounted price.
Although Wild Oats offers a large selection of unique pizzas, the chain doesn't typically run promotions for the items. Instead, the retailer relies on word of mouth, which must be working because sales have remained steady for years, added Tuitele.
Meijer, Grand Rapids, Mich., recently promoted its own branded Pizzeria Style Deli Pizza in the "Deli Fresh" section of its weekly circular. The pizza was one of many party food items that appeared in the ad that ran the week before the Super Bowl.
For a total savings of $5.98, shoppers who received the circular could purchase two 18-inch pies piled high with gourmet toppings for $10. The deal offered consumers more bang for their buck compared to the basic 14-inch pepperoni pies offered by local Little Caesar's carry-out stores.
Three varieties of Meijer pizza were available during the sale, including five-cheese, pepperoni and deluxe.
While the chain doesn't offer precooked pizzas, Meijer makes its oversized deli pizzas a bit more appealing by using upscale ingredients like sun-dried tomato sauce and a mixed bag of cheeses like asiago, Romano, mozzarella and Parmesan, instead of mozzarella-only pies.
According to a deli associate at the chain's North Muskegon store, Meijer-brand, deli-style pizzas were completely sold out the day after the chain's Super Bowl ad was circulated. That happened to be a full six days before the big game. The store had to drop-ship more pizzas the next day, and the deli department was continually stocking a small refrigerated case throughout the day on Tuesday.
"We usually sell all of our deli pizzas before different games or other events, but this week has already been crazy," the store associate said.
Pizza programs are by no means a sure bet, however. Some retailers have bailed out of the business entirely.
Finlay, Ohio-based Fresh Encounter dropped its deli pizza program in 2000 for a variety of reasons, Eric Anderson, vice president of marketing, told SN.
"Competition against home delivery was tough, and price points were a little high as well," said Anderson. "...the pizza business is very competitive."
Instead of selling premade deli pizzas, Fresh Encounter opted for pizza kits with all of the ingredients to make pizza at home. This scaled-back selection is more suitable for the chain's local market and is faring well, said Anderson.
When Little Caesar's started offering 14-inch, $5 pizzas hot and ready for carry-out every day of the week, the battle between area supermarkets and pizza chains became brutal. Anderson said a Little Caesar's franchise owner in Michigan recently told him the company's corporate decision to offer the low-priced pies on a daily basis had significantly boosted his location's profits.
Fresh Brands, Sheboygan, Wis., also got out of the private-label pizza business.
"Years ago, we had pizza islands or kiosks filled with Fresh Brand take-and-bake pizzas," said Candy Kornitz, bakery director at Fresh Brands. "We sold them like crazy, but this has become a huge frozen market. We just couldn't compete price-wise anymore. We're located in the birthplace of Jack's and Tombstone, so there was virtually no chance for us to make it with fresh pizzas."
But for retailers that put their noses to the baking stone and commit to competing, pizza can be quite lucrative, said Kornitz.
"Sometimes, supermarkets try to do too much, which ends up hurting sales instead of adding to them," she said. "If you can dedicate yourself to doing pizzas, you can get it done and it can be a good money-maker for a chain. But if you're going to need to pull a deli worker away to make sandwiches all the time, it gets too difficult."