Forum Archive Index - December 2003

[<philip@goodreturns.co.nz>]

Thanks for that post Karyn - very enlightening. Can you tell us about WHS
Ta

-----Original Message-----
From: sharechat-owner@sharechat.co.nz
[mailto:sharechat-owner@sharechat.co.nz]On Behalf Of Karyn W
Sent: Wednesday, December 10, 2003 6:56 PM
To: sharechat@sharechat.co.nz
Subject: Re: [sharechat] Dominos/Pizza Hut competition

Well, here's the eyes and ears from Melbourne, Vic where RBD have 51
outlets.  In my view, this company must be going down the toilet, dragged
down just like most NZ companies who bought up a dying Australian business
only to find out it was for sale for a good reason.    Why?

1.  Pizza is the number one takeaway food in Australia.  While you might
think this is good for RBD (big market, high sales volumes, etc), don't be
fooled.  Australians are pizza connoisseurs - meaning they can tell a good
one from a bad one.  And trust me - Pizza Hut pizzas here are simply
terrible!  I ordered some a few months ago, and will never order them again.
  One was so bad I couldnt even eat it.  The base of it was so thin and
soggy you couldnt even hold it up to eat it.  The topping was equally
sparse.  Cost cuts = poor quality products!

2.  Competition is fierce.  In my drawer I have brochures from over 20
different pizza outlets in the area that will deliver a pizza to my door -
for free.  There are simply millions of little restaurants and cafes in
Australian suburbs, all delivering a variety of takeaway foods to the home.
I could order in every night for over a month, and still not get through all
my local restaurants that home deliver.

3.  Back to the connoisseur thing again.  All pizza outlets do "gourmet"
pizzas, and these are usually their most popular product.  Pizza Hut tried
to introduce a new "gourmet" range here, but it flopped (they blame this
promotion for their recent poor figures).  The truth is that they simply
cannot compete with a local outlet who uses fresh and specialised produce to
make great pizzas.  Most people would prefer to order a great pizza and pay
$5 extra, than a crap one that they cant even eat.

According to a recent (Australian) media report - "sales from Australian
stores open at least 12 months fell 4 per cent, the company said - better
than a 5 per cent fall in the fourth quarter and a 14 per cent drop in the
third quarter, it said".

What a surprise!  Not.

Pizza Hut has 90 NZ stores. It has 51 Australian stores - thats over one
third of the business losing customers, losing sales, losing money.  How
long before another Air NZ/Ansett?

Karyn

PS.  The Warehouse is in even more dire straights over here.  Let me know if
you want an overview of the discount retailing market in Australia and why
the Warehouse is equally doomed :-)

_________________________________________________________________
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