Sbarro to open test units, tweak menu

Sbarro to open test units, tweak menu

Chief executive Jim Greco speaks with Nation’s Restaurant News about his plans to revive the quick-service Italian chain

Jim Greco is only about 60 days into his new job as president and chief executive at Sbarro Inc. [3], but the turnaround veteran already has big plans for the Italian quick-service brand.

Greco, who joined the 1,025-unit chain soon after it emerged from Chapter 11 bankruptcy protection [4] in November, says management currently is executing a short-term 100-day plan that will include the launch of 10 test units in June. Those locations will showcase some of Sbarro’s new strategic initiatives — such as reformulated pizzas and made-to-order pasta dishes.

As part of his longer term vision, Greco said he plans to shift the Melville, N.Y.-based brand away from its quick-service roots and into the fast-casual arena over the next several years.

“The vision is to be the preeminent fast-casual Italian brand worldwide,” Greco told Nation’s Restaurant News Friday. “We think it is a space that fits Sbarro well and one which nobody of any size has yet claimed. And we think it is one we can own in a relatively short period of time.”

Meanwhile, the chain’s short-term strategic plan calls for a focus on four categories — “people, place, product and positioning,” he said.

On the product front, Sbarro is revamping its pizza and pasta offerings. “We’re making tweaks to recipes and also are changing procedures for both,” said Greco, who most recently was chief executive of Bruegger’s Bagels and co-chief executive of parent Le Duff America.

“We’ve hired consultants who have a lot of experience in the Italian space, and they’re helping us,” he said. “We will have an even more desirable pizza offering and totally new pasta offerings that will be made-to-order.”

As part of the recipe reformulation process, Sbarro is making some tweaks to its pizza dough, which is prepared fresh every day, he said, adding, “It will improve the taste and texture.”

Likewise, Sbarro is making changes to other ingredients, like its tomato sauce.

“We contract to have our own tomatoes grown and packed in California,” he said. “That will remain the same, but we plan on adjusting the seasonings used in the sauce.”

The chain also plans to use better cheese in its dishes, he said.

Greco said guests will have several different choices of pasta and sauces. “Pasta will be made-to-order in sauté pans and with induction cooktops — which will mean new equipment for each outlet,” he said. The revamped cooking battery also will include new ovens.

These new initiatives will be introduced to the public in early June at 10 test units that will be “designed to show what we’re doing and get feedback,” Greco said. And while the test units “will not be fully redesigned — we’re not ready for that yet — they will be refreshed. A new design will be unveiled later this year.”

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To help address the “people” component of the plan, Greco said management has been holding seminars around the country with team members to introduce “a new culture of hospitality that we want every Sbarro to reflect. We’ve been training senior operations teams — vice presidents, trainers, district managers and GMs to implement our new culture of hospitality.

“It involves things like how to recruit, hire, train and empower team members,” he said. “It also involves a new recognition and rewards program. At the 10 test units, we will have the best teams displaying our new culture of hospitality. Obviously, it will take longer to roll it out throughout the whole system.”

To help with its new focus on “positioning,” Sbarro hired a firm specializing in brand positioning. “We had previously conducted a great deal of research, and shared it with the firm,” Greco said. “They are helping us synthesize it into a positioning statement, which will guide much of what we do going forward, including the new store design in our test units.”

And while Sbarro does little advertising, the new positioning will be reflected in point-of-purchase and marketing materials, and new menu items.

Greco said the grand opening of the 10 new test units also is expected to be “a big event with a lot of activities to support it. We’re working on things like live radio remote, mailings and VIP invitations.”

He has spoken to all of the chain’s major franchisees about the new changes — including the store updates — “and they’re very excited about the new ideas and seem to be very supportive.”

Of Sbarro’s 1,025 outlets, 625 are company owned — chiefly located in the United States and Canada — while 400 are franchised.

“Based on my experience, we think the cost of the renovations will be very modest,” he said. “The new equipment is not that expensive, and we believe we’ll be able to remodel the typical Sbarro for a very modest price tag.”

While Sbarro will continue to grow — 50 to 60 new openings are planned for 2012 — Greco said the focus is not currently on “ramping up unit growth. The focus is on supporting unit growth in the pipeline and executing our strategy to improve the brand.”

To that end, he is optimistic about the chain’s future.

“We are in a great segment, we have a great team of folks, we have the financial ability to fund the changes we’re planning to make, we have a clear vision and a well-thought out strategy.

“If there are any headwinds, they would be what everyone else is facing — the weak recovery we’re in. Certainly if economic growth were to improve, if the country adds jobs and the housing market starts to build, it will bode well for everyone in the restaurant industry.”

Sbarro is owned by a group of about 30 investors, of which the largest is Stone Tower Capital in New York.

Contact Paul Frumkin at [email protected] [5].