Wisconsin-based Topper's Pizza just launched its first-ever "mobile pizza store" this past July. The brand is one of many testing the waters of mobile food delivery vehicles. Executives hope it's a strategic move that will help them gain a market share edge in the highly-competitive pizza sector.
Scott Iversen, Toppers Pizza's director of marketing says, "Thus far we are only using it (truck) within the delivery area boundaries of a corporate owned market. We want to determine the best ways to utilize the truck to capture additional sales from a current trade area before suggesting to franchisees to make an investment in one for their areas."
He sees numerous potential advantages to the mobile model. Iverson believes the trucks will help capture more "impulse sales" opportunities than a traditional brick and mortar location could. "On average, our franchises already produce very high average unit sales ($941,000/year) but if we could build on those high averages with a model that produced even more revenue from the same size trade area that would be an attractive investment for our franchisees," he says.
He also says the truck could be great for getting customers to give the brand a try. "In a mobile store we can offer our same products in smaller/trial size portions for a lot less and they're ready without having to wait to be delivered or picked up," he says. Additionally, the truck itself serves as a giant moving billboard for the brand's brick and mortar stores; a constant visual reminder that there is a Toppers store in the neighborhood.
Iverson says the first truck was built for around $160,000 but he thinks it could be done for less. Compare that to the $400,000 it typically takes to build a brick and mortar store. The truck even features much of the same equipment found in their stores. "We can produce over 100 full pizzas per hour in the truck with capacity to triple the product volume by adding two more ovens if we need to do so," he says. "The big advantage the truck has over a regular store is that many of the fixed costs are one-time expenses (building and equipping the truck) rather than ongoing expenses (rent, utilities, etc.)"
Since the fixed costs are lower, the truck has the potential to offer a much higher operating profit margin. "Our current brick and mortar stores average $161,000 or around 17 percent profit," says Iverson. "Profit margin in the truck can approach 30 to 40 percent on the best days." Though he notes it still comes down to maximizing the same three important variables as in any restaurant - top line sales, food cost, and labor cost.
As you might expect, Iverson believes social media will play a critical role in the mobile truck plans at Toppers. "Social media is today's word of mouth. It is where people are having conversations with their friends and family," he says. "If we want to be a relevant part of people's everyday conversations we have to be present in the space where they have those conversations. Social media is the vehicle we use to tell people where we are going to be and when."
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