pie five

Pie Five tests wings, adds table delivery

Fast-casual pizza brand’s initiatives aim to drive traffic amid sales declines

Pie Five Pizza Co. is testing chicken wing sales and modifying its order-service model as it looks to boost traffic and sales, company executives said Monday.

“After considerable consumer research, we’ve identified key initiatives that have the potential to increase store sales and traffic trends,” said Scott Crane, CEO of Dallas-based Rave Restaurant Group Inc., parent to the Pie Five and Pizza Inn brands, in a post-earning release call with analysts.

Crane said a new prototype Pie Five, opened in August in Plano, Texas, is serving as a laboratory for some of the company’s efforts to stem sales declines at the 84-unit fast-casual pizza concept. Pie Five’s same-store sales fell 16.2 percent in the fiscal fourth quarter ended June 25 from the same period a year earlier.

The new Pie Five units also features other changes being tested for the concept, including sales of wine by the bottle and by the glass and craft beers on tap, Crane said.

The store is one of about 25 units testing in-house delivery, which will be expanded to the 85-unit system by the end of 2018, Crane said. “Clearly consumers want Pie Five and would use us more often if we add that to the top of the funnel.”

Crane said the new store allows opportunities to expand the menu, which in addition to personal-sized pizzas includes an option for a 14-inch pizza that serves two, as well as items such as chicken wings, which are being tested at three locations.

“We are offering five different flavors and serving both bone-in and boneless,” he said, adding that consumer research indicated patrons would visit more often if more menu options were offered.

Crane said the new initiatives are aimed at increasing the average ticket, which executives anticipate can add between 10 and 15 percentage points of incremental sales.

In the test-prototype store, Crain said, wings now make up 7 percent to 8 percent of sales, the larger format 14-inch pizza is at about 5 percent to 6 percent of sales, and craft beer is 3 percent to 4 percent.

Pie Five

Tim Mullany, Rave chief financial officer, said the Plano prototype is also allowing the brand to test new service initiatives.

“We’re doing things here that we don’t do at our other locations, like an order-first process,” Mullany said. Customers now place their orders at a register placed at the beginning of the line rather than the end, as in other Pie Five units.

“The order is taken before the pizza is made rather than after,” he said. Customers are then given a number so they can sit at a table instead of waiting at the counter. A staff member delivers the finished pizza to the patron’s table.

The company has also redesigned the Pie Five interior to make the kitchen more visible to the guests, Crain said.

Customers appear to be welcoming the changes, Mullany said, adding: “We are enthused from the early data we are getting.”

Crane said Rave will also be introducing an all-day buffet at its Pizza Inn brand later this year.

For the fourth quarter ended June 25, Rave said it narrowed its net loss to $1.1 million. Revenue fell 14.2 percent, to $13.3 million, from $15.5 million in the prior-year quarter.

For fiscal 2017, Rave’s net loss widened to $12.5 million, or $1.18 a share, from $8.9 million, or 86 cents a share, last year. Revenue declined 4.5 percent, to $57.1 million from nearly $60 million in fiscal 2016.

While same-store sales declined at Pie Five, they rose 0.2 percent at Rave’s buffet-based Pizza Inn. 

As of June 25, Rave owned and operated 13 Pie Five restaurants. The company also franchised 71 Pie Five Units and 221 Pizza Inn buffets, express and delivery-carry-out restaurants. 

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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