Canadian Pizza Magazine

Pizza Pizza delivery and pickup offsetting walk-in sales losses

By Canadian Pizza   

COVID-19 Updates News Business and Operations Finance pizza hut

Toronto – The loss of walk-in sales and non-traditional sales have cut into system sales for Pizza Pizza and Pizza 73, but the increase in delivery and pickup sales are helping make up for losses.

Pizza Pizza Royalty Corp, which indirectly owns the Pizza Pizza and Pizza 73 , released financial results for the three-month and six-month period ending June 30.

“Looking back from today to the beginning of the pandemic, July comparable sales have rebounded quickly, up 20 percentage points from April sales,” said Paul Goddard, CEO, Pizza Pizza Limited. “Our traditional restaurants posted solid results in the latter part of the quarter and into July, and account for approximately 90 per cent of royalty pool system sales.

“Our delivery and pickup sales, particularly through our digital channels, grew significantly throughout the second quarter, nearly offsetting a major decrease in our dine-in sales that was unavoidable due to government mandated restrictions. During the early part of the quarter, we quickly introduced innovative customer-centric safety measures such as contactless digital transactions and industry-first tamper-free pizza boxes, providing customers additional assurances when ordering. Most of our non-traditional restaurants, which account for 10 per cent of sales, remain closed due to government restrictions, although we are encouraged to see provinces beginning to ease restrictions on some of these captive-market locations.


“As well, many key municipalities recently began allowing restaurant dine-in to resume, which we expect to provide a helpful tailwind to our overall business, given walk-in/dine-in historically represents 40 per cent of total sales at Pizza Pizza. We are also optimistic that the return of televised professional sports events should add additional momentum to our delivery business at both brands.”

Second-quarter highlights compared to the second quarter of 2019:

  • Payout ratio was 83 per cent after adjusting the monthly dividend in April.
  • Working capital reserve increased $761,000 during the quarter to $3.4 million at June 30, 2020.
  • Royalty pool sales decreased 15.5 per cent, largely due to non-traditional restaurant temporary closures.
  • Same-store sales decreased 16.3 per cent, largely due to non-traditional restaurant temporary closures.
  • Adjusted earnings per share decreased 15.4 per cent.
  • Restaurant network decreased by 10 locations; pipeline steadily building for 2021 growth.

“Our total sales continue recovering from the -26 per cent same-store sales low watermark in April,” Goddard said. “Our strong and growing delivery focus at both brands, together with our recent relaunch of our digital ordering apps, have been major sales-driving advantages during our recovery.”

For the three months ended June 30, 2020 system sales from the 749 restaurants in the royalty pool decreased 15.5 per cent to $113.5 million from $134.3 million in the same quarter last year when there were 772 restaurants, the company reported in a news release.

Sales from the 645 Pizza Pizza restaurants decreased 17.9 per cent to $92.1 and sales from the 104 Pizza 73 restaurants decreased 3.1 per cent to $21.4 million for the quarter.

For the six months ended June 30, 2020, System Sales decreased 10.8 per cent to $239.3 million from $268.2 million in the prior year’s comparative period. For the six months, sales from the 645 Pizza Pizza restaurants decreased 11.6 per cent to $197.3 million and sales from the 104 Pizza 73 restaurants decreased 6.6 per cent to $42.0 million.

Total royalty pool system sales for the quarter decreased over the comparative periods largely as a result of the negative impact of the COVID-19 pandemic and the change in the number of restaurants on Jan. 1, 2020.

Pizza Pizza traditional restaurant sales have historically consisted of approximately 60 per cent delivery and pickup sales and 40 per cent walk-in sales, whereas Pizza 73 traditional restaurant sales have been approximately 90 per cent delivery and pickup sales and only 10 per cent walk-in sales.

As a result of government-mandated social distancing policies, the walk-in sales at both brands decreased significantly beginning in mid-March and this trend continued throughout April; however, walk-in sales began modestly improving in May and have continued to improve in June and July. During the same period, delivery sales have grown significantly and, thus, have partially offset the lost walk-in sales.

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