Telepizza quits restaurant business

- Last updated on GMT

Related tags: Fast food

Telepizza, the Spanish fast food pizza producer, has decided to
play to its strengths and focus on its takeaway business, the
company announced yesterday. Its plans to open a 120-strong chain
of La Piazza pizza restaurants have been scrapped.

Telepizza, the Spanish fast food pizza producer, has decided to play to its strengths and focus on its takeaway business, the company announced yesterday.

The decision means the sale of the group's restaurant business La Piazza, which has struggled to compete in a crowded marketplace, according to executive vice president José Carlos Olcese.

He said that the decision had been taken three or four months earlier after a lengthy consultation, but that the company saw no alternative but to sell the 10 or so La Piazza outlets. "There is too much competition in the out-of-home market,"​ he said.

Telepizza had hoped to launch into the sit-down restaurant business in a big way, with plans to create a major new player with more than 120 outlets across Spain. The company was predicting sales of €86.55 million from the chain, which was to be rolled out in three formats: restaurants in major shopping centres, so-called chalet-restaurants located on the outskirts of towns and city-centre outlets.

The ten or so restaurants opened by Telepizza since March 2001 will now be sold, allowing the company to concentrate on "what we know best how to manage"​: takeaway pizza sales. The restaurants may be sold off individually or as a block, the company said.

With the decision taken to quit the restaurant sector, the company has already announced a new venture in the traditional Telepizza format. The company is to open an outlet in association with the Opencor convenience store chain owned by the El Corte Inglés retail group as part of a pilot scheme which will see the fast food chain sell a range of 90 food and non-food products alongside its traditional offering.

The test outlet in Valencia will run for six to eight months, and Telepizza said that other outlets could be rolled out if it proves to be a success - although no firm agreement has as yet been reached with El Corte Inglés.

The store is similar to those which Telepizza already operates in association with the Blockbuster video rental group, and which have already proven to be a success.

Telepizza has also unveiled a new corporate logo and store design, which will be rolled out in al its outlets at a cost of some €5 million. The new-look outlets, both wholly-owned and franchised, should be seen throughout Spain by the end of next year, the group said. The company currently has 858 outlets, of which 56 per cent are franchises.

Related topics: Market Trends

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