Interface News Reporter | Wu Rong
Interface News Editor | Ya Han Xiang
Le Caesar Pizza finally wants to break out of the Guangdong market.
Founded in Shenzhen in 2009, with its main durian pizza, Le Caesar Pizza has developed to nearly 200 directly-operated stores, mostly concentrated in core shopping malls in first-tier cities such as Shenzhen and Guangzhou. In 2010, after its launch, Zumbo Pizza, also born in Guangdong, opened its franchise, and now it has ten times as many stores.
It was only now that Le Caesar Pizza decided to do it.
On December 28, Le Caesar Pizza announced that it will officially open its franchise in January 2024, launching two models: single-store franchise and regional franchise. Le Caesar Pizza hopes to expand its store network to new first-tier and second-tier cities, as well as develop community-based stores.
"In advantageous markets such as Guangdong, we prefer single-store franchising, franchisees can maximize brand dividends, in the blank markets and overseas markets that we have not yet entered, we open up the possibility of regional cooperation, and Le Caesar will provide resource support. Xu Xu, vice president of Le Caesar, said.
Judging from the public information, the minimum investment cost in the early stage, including franchise expenses and decoration costs, is about 700,000 yuan, excluding rent and labor costs.
According to Frost & Sullivan data, from 2022 to 2027, the revenue scale of China's pizza market is expected to grow at a compound annual growth rate of 15.5%, reaching 45.8 billion yuan in 2023 and 77.1 billion yuan in 2027.
"The pizza track has strong standardization and high chain rate, but the domestic market penetration rate is low, and there are still a large number of blank markets to occupy, and the industry competition pattern has not yet been determined. Xu Xu said that this is one of the reasons why Le Caesar Pizza has been released as a franchise. In addition, Le Caesar Pizza has previously polished the store model and supply chain, which is believed to support the subsequent large-scale development.
Jiemian News saw from the information disclosed by the brand that Lekaiser has recently made corresponding adjustments from the brand image to the overall price.
For example, it lowered its prices first. Le Caesar has announced a price reduction through its WeChat public account, and emphasized that it is not a short-term promotion but a long-term price adjustment, and some products have decreased by 20%-25%, such as the core one-person meal from 49.9 yuan to 34.9 yuan, and the main two-person meal from 149 yuan to 99.9 yuan.
In addition, it has carried out a series of visual design optimizations and repositioning on the basis of the original brand, and also changed from the original "Le Caesar Durian Pizza" to "Le Caesar Pizza", and removed "Durian" from the brand name. Its intention may have been to de-emphasize this mega-piece.
In the menu, although there is still durian pizza, there are also many other flavors such as pizza, steak roast chicken and snacks. This strategy distracts brands from their strong reliance on popular items, and also caters to the current consumer trend of decentralized and segmented demand. At the same time, it is also believed to be able to activate old customers and expand new consumers, and can further expand the pizza category.
Subsequently, in May this year, Le Caesar Pizza also reflected on the past 270 square meters, monthly rent of 200,000 yuan, investment of 5 million yuan, etc., and turned to study the optimal area range, the optimal number of meals in the sub-model, and the upper limit of the investment amount.
A franchise strategy may be able to help Le Caesar Pizza go further.
At present, the layout of Le Caesar Pizza stores is mostly limited to the first-tier cities of Guangdong, with nearly 130 stores in Guangzhou and Shenzhen, accounting for 65% of the total, and before that, Le Caesar Pizza has also opened stores in Shantou, Dongguan and Zhongshan in Guangdong, but the number of stores is not large.
In the same industry, the pizza brands that took the franchise model earlier have now penetrated into the sinking market.
For example, Zumbo Pizza has expanded to about 2,800 stores in a "direct + franchise" model, half of which are located in second- to fifth-tier cities.
The parity positioning of 30 yuan per capita, the lightweight store type and the low franchise threshold are important reasons for Zunbao's rapid expansion. Now, it also intends to further accelerate, in the past two years, Zunbao has launched various franchise subsidy policies from time to time.
Joining also allowed Zumbo Pizza to catch up with its competitors.
According to the industry overview of Domino's China's prospectus, in 2022, Pizza Hut China ranked first with a revenue of 13.2 billion yuan and about 2,900 restaurants, accounting for 35.2% of the market share, while Zumbo Pizza ranked second with an annual revenue of 2.1 billion yuan, 2,200 stores and a market share of 5.6%, surpassing Domino's China. And Le Caesar's pizza came in fourth.
Le Caesar's idea of market penetration through franchising is also in line with the current wave of franchises in the Chinese catering market. And Le Caesar's pizza, which is only now open as a franchise, is facing an increasingly tight market. While Western fast food KFC and McDonald's are expanding like crazy, so are its pizza brands.
Domino's Pizza, for example, announced on December 23 that it had opened eight new cities in China. According to Domino's Global System internal rankings, among Domino's top 10 global first-month opening sales, Chinese stores have occupied nine places. It also set a goal of opening 1,000 stores by the end of 2024, and Domino's Pizza now has more than 750 stores in China.
In the competition where opponents are all striving to expand, if you want to achieve what Xu Xu said about occupying the blank market, Le Caesar Pizza, which started late, can only catch up desperately at the moment.