Heat cranked up in NZ pizza kitchens

By KARYN SCHERER

The ovens are being fired up for pizza wars, with the country's second-largest chain signalling a $2 million revamp.

Pizza Haven, which entered the New Zealand market six years ago, plans to build at least 12 more stores over the next two years, as the battle continues to persuade consumers to add even more fast food to their diets.

The expansion could create 240 jobs and puts more pressure on pizza prices, which have fallen below $6 for a large takeaway.

As well as building new stores, the chain is refurbishing existing outlets, with more emphasis on a cafe-style area for pick-up sales.

The chain says the move has been prompted by the growing willingness for customers to pick up their own pizzas instead of paying more for them to be delivered.

It is also fighting back after the Advertising Standards Authority forced it to pull two television advertisements that were part of a campaign launched in March.

The advertisements, created by an Australian agency, featured a woman being branded with a hot iron and another receiving an electric shock.

Pizza Haven's New Zealand marketing manager, Simon Burley, said the chain was very unhappy about the decision, which it was appealing.

"We've received an enormous amount of feedback from customers and franchisees that they loved the ads.

"We were extremely disappointed about it, but we're developing a new range of ads that keep using humour and keep on pushing the boundaries," he said.

The move follows a decision by Pizza Hut owner Restaurant Brands to buy the 53 Eagle Boys stores in New Zealand.

The $28 million deal will effectively double the number of Pizza Hut outlets throughout the country and leave just two main players in the $100 million pizza market.

Four Eagle Boys outlets have already been converted into Pizza Huts and the rest are expected to be remodelled by October.

In Auckland this week, Pizza Haven's Australian-based business development manager, Tony Iommazzo, denied the move was prompted by the deal between its rivals.

"Not at all - we have been planning this for some time," he said.

"It's a natural progression. Sales grew by about 10 per cent last year."

The manoeuvring comes as takeaway food sales appear to be slowing after a burst of growth over the summer.

Restaurant Brands revealed this week that sales had softened over the past few months.

On a same-store basis, sales for the 16 weeks to the middle of June were down 3 per cent at both Pizza Hut and KFC compared with the same time last year.

Restaurant Brands' chief executive, Jim Collier, said yesterday the Pizza Haven move seemed to be a response to the Eagle Boys deal.

"The likely volume relationship is two to one and I'm sure they're trying to do something to be not quite such a smaller player."

Mr Collier also hit out at price-cutting that has seen pizza prices fall as low as $5.95 for a large pick-up pizza.

"At some point a pizza is too cheap and people call its quality into question."

Pizza Haven is not the only major franchise expanding in this country.

Another Australian-based chain, Bakers Delight, confirmed this year that it plans to open more than 30 new stores in New Zealand over the next two years.