BACK

INTEGRATED REPORT 2017

Passionate people building great brands

PIZZA AND PASTA

PIZZA AND PASTA INCLUDES THE PANAROTTIS AND CASA BELLA BRANDS

Both restaurants are Italian-themed, and are built around quality and the finest ingredients – including our award-winning 100% Italian imported pizza flour and 100% Durum wheat pasta.

Family-focused, offering value for money, and structured to meet the needs of local middle-income customers.

An upmarket restaurant brand that merges Italian cuisine with a sophisticated yet welcoming dining experience. Menu items include hand-pressed pizzas, fresh sauces made to order, quality wines at reasonable prices and ribs and grills cooked inside the wood-fire oven, giving them a unique flavour.

 


  • Panarottis promotions

  • – Thursdays Eat as Much Pizza as You Like
    – Tuesday Buy one Get one Free
    – Weekday Breakfast Special

PERFORMANCE SCORECARD

Performance overview

Total restaurant turnover grew 13.3% to R760.6 million (2016: R671.1 million) driven largely by ongoing local marketing by franchisees and improved in-store execution. Franchisee profitability was further bolstered by optimising labour levels and negotiating reduced rentals where possible. This was supported by revamps at four stores and the relocation of one outlet.

The pizza sector continues to be highly competitive, with rival brands running heavily discounted specials and increasing television marketing. While discounting is attractive to some consumers in the current recession, Panarottis has maintained its focus on quality and customer experience. Operating margin for the year decreased to 64.7% due to increased operations management salaries, various temporary franchise fee concessions to support the profitability of franchisees and the inclusion of development costs for Casa Bella. There was also a substantial investment in nutritional analysis to provide useful dietary information to customers to support healthy decisions.

Menu engineering once again proved to be extremely beneficial and resulted in food costs remaining consistent for most of the year despite food inflation remaining high.

The downturn in the economy, recession and low business confidence due to political uncertainty reduced investors’ interest in new business developments and no new restaurants were opened during the year, the first time this has happened in five years.

We developed the design for the next generation Panarottis, which brings a fresh and more modern look in keeping with local and international trends that has seen strong interest from franchisees.

The Panarottis Rewards loyalty programme launched last year was well received by customers, growing to 243 000 active members (2016: 86 000) by year-end.

The focus for Casa Bella, which started trading in the 2016 financial year, was on refining franchisee systems and procedures, including improving labour levels and reducing food costs. We opened four new restaurants in Somerset West, Sun City, Ballito and Umhlanga, and supported franchisees through the process of establishing these outlets.

The new Casa Bella restaurants planned for 2018 are all opening in Gauteng to increase the brand’s presence in that province.

Strategic outlook

In the year ahead, we will continue to focus on supporting franchisees through the current challenging economic times. This will include prioritising improved operational fundamentals, financial reviews, labour levels, energy costs, service and product innovation. Casa Bella will bring its unique Italian cuisine and fine dining experience to at least two new locations.