Pizza Hut tests faster ‘counter service’ model at restaurants with lower sales

Casual dining chain Pizza Hut has been working on testing and refining a ‘counter service’ model aimed at achieving faster service in its UK stores.

Testing of the model was first implemented in Coventry last year, with a further 11 sites rolled out by the end of 2017.

The company hopes the approach will boost restaurants with lower sales by making the customer journey simpler.

Pizza Hut highlighted its plans in its 2017 annual report, which was lodged with Companies House this week, explaining: “The project is focused on restaurants with lower sales, and simplifies the operation with ‘greet and seat’, ‘order and pay’ at till point when you are ready to place your order, and self-serve condiments, drinks, salad and ice cream factory.”

The company, which underwent an MBO in April this year, said the concept is supported by a “modest” capital investment.

Other initiatives that Pizza Hut is driving include its ‘Heart with Smart’ programme, which is designed to strengthen compliance and brand standards while providing direction to restaurant managers around the opportunities within their restaurant.

Each restaurant receives four unannounced visits per annum and the programme encompasses around 300 practices. The aim is to strengthen the manager’s ability to cope with change, reinforce operational fundamentals, drive consistency across the estate and link specific practices and behaviour.

“The programme allows the ability to collect valuable data and insights centrally providing a useful tool to unlock opportunities across the estate,” Pizza Hut stated in the report.

The accounts, for the 12 months to 3 December 2017, shows that Pizza Hut made sales of £225m last year, down 3% from the £233m it posted in 2016. Like-for-like sales fell 1%.

The chain said toughening conditions in the casual dining sector, combined with warmer conditions across spring and early summer and less ‘family friendly’ cinema releases, were factors behind the softer sales.

The company recorded an operating loss of £390,000 for the year versus a £7.36m profit the year before, pointing out that the royalty rate it pays under its franchise agreement has increased and the prior year included an extra trading week.

Operating profit includes trading EBITDA of £30.4m, which increased 7% year-on-year. Overall losses for the year totalled £7.84m.

The company said effective scheduling had improved the flow of each shift, which in turn optimises the guest experience and drives their intent to return, while a focus on practices enabled improvement in ‘cost per plate’ and ‘waste management’, driving benefits within cost of sales that helped to mitigate increasing ingredient costs.

Pizza Hut’s refurbishment programme continued in 2017 and by the end of the year 214 restaurants were reimaged, representing 80% of the estate. Five sites were exited during the year, while one was opened, leaving it with a total estate of 262 restaurants at year-end.

Looking to the future, management stated in the report: “Following substantial capital investment over the last five years, Pizza Hut now has a consolidated and refurbished estate. While there will continue to be targeted projects and initiatives, the next few years are expected to be less capital intensive and more focused on further optimising the operating and economic model.”

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