Top of the food chain

Written by Eve Lazarus

Broad demographic appeal: Boston Pizza outlets feature both a casual sit-down restaurant and a sports bar, allowing each restaurant to attract families, couples, teens and young adults, while generating revenue in three time periods: lunch, dinner and late-night.

Location, location, location: Generating around-the-clock business requires savvy site selection. Boston Pizza looks for rural or suburban locales with plenty of room for parking. Outlets must be located near businesses to attract the luncheon crowd, and nudge up against high-traffic consumer havens such as Wal-Mart, Home Depot and movie theatres.

Low food costs: Boston Pizza’s signature menu items, pizza and pasta, produce higher margins than the steak-and-burger fare of other casual-dining chains. Boston Pizza’s food costs are 25% of revenue, compared with the industry average of 38%.

Consistent systems and product: Recipes, for instance, are developed by an executive chef at head office; meals in individual stores are prepared not by high-priced chefs, but by cooks who follow precise instructions.

Low prices: At $13.43, Boston Pizza’s average guest cheque is low for the casual-dining market. Such prices are almsot recession-proof, catching people moving up from fast food during good economic times, while attracting upscale patrons during the bad.

Profit-sharing: Corporate staff from the receptionist up to the president share in the profits. Says Boston Pizza CEO Mike Cordoba, “We hire great people and then we pay them for their success.”

© 2006 Eve Lazarus

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