I’m pretty sure that at one time or another, we’ve all eaten at a Sbarro pizza store. In my case, I’ve run into them in airports as I’ve been looking for a quick lunch or dinner on the way to catching my next flight. They are also in just about every mall out there. However, in the past few years the company has been struggling. The company has had to enter into Chapter 11 twice. The reason that they’ve had such problems is because the malls that they rely on have suffered through a global recession. What can the Sbarro product managers do to update their product development definition and get the company back on solid footing?
New Stores, New Plans
What the Sbarro product managers are thinking about doing is returning the company to its roots as a pizza shop that specializes in making New York pizza. One of the things that the product managers are going to have to keep in mind is that they will be competing with the big pizza chains: Domino’s, Pizza Hut, etc.
The company plans on opening neighborhood pizza shops in Columbus Ohio. After the first four have been opened, the company then plans on opening up to 100 more of these types of stores over the next two years. These new restaurants will offer pizza in the three ways that customers expect to be able to purchase it: dine in, pick up, and home delivery. If they can pull this off, this will look nice on a Sbarro product manager resume.
In order for the stand alone restaurants to be successful, the Sbarro product managers have had to slim down the menu. They have removed the lasagna, chicken Parmesan, and vegetable dishes. The belief is that by offering these non-pizza menu items Sbarro was becoming distracted from offering great pizza. The product managers want customers to think “pizza” when they think Sbarro.
The Sbarro chain has shrunk from over 1,000 locations to just 800 today. A study of malls in the U.S.A. has revealed that there are just over 900 of them that have a food court. Currently Sbarro is only in 1/3 of them. The product managers want to expand the number of malls that Sbarro is in; however, they no longer want mall based stores to represent 90% of the Sbarro sites. They are instead shooting to have mall stores only represent roughly ½ of the company’s stores.
A big shift that is occurring in the pizza industry right now is the adoption of mobile technology. Dominos, Pizza Hut, and Papa Johns are rapidly adopting mobile ordering technologies that many local stores are struggling to implement.
At the same time a new type of competitor has started to show up. Upstart stores focused on gourmet pizzas which are created on a while-you-wait model . Sbarro has seen this new competition arise and they have taken steps to adapt to it. The product managers have opened three stores in a new chain called Pizza Cuclnova which creates specialty pizza. Sbarro is counting on being able to reach the customers who tried them in the mall and liked them. Their challenge is that there are a lot of other pizza stores and they need to find a way to stand out from all of them.
What All Of This Means For You
We almost lost Sbarro twice to Chapter 11 filings. However, the firm has battled back from the brink and they are once again trying to determine what they need to do in order to change and become successful. Their product managers are leading this charge based on what’s in their product manager job description. They’ve got some ideas for new things that Sbarro can do.
Sbarro currently has restaurants located in a number of malls. They want to continue to grow this number beyond the 800 that they have today. However, they no longer want this to represent 90% of their stores – 50% would be better. They plan on opening new sit down / take out restaurants that focus on their unique style of New York pizza. They need to be aware that a new breed of competitor is showing and creating gourmet pizzas, but Sbarro is planning on opening their own stores to do the same thing.
The Sbarro product managers have a chance. They are going to need to carefully execute their plan and break the company’s dependance on their mall locations. Additionally, they are going to have to find something that will set Sbarro apart from all of the other pizza chains that are out there. Good luck!
Question For You: Do you think that Sbarro should start to include gourmet pizzas in it’s mall stores?
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What We’ll Be Talking About Next Time
As a testament to just how ubiquitous they are, if I was to say “7-11” to you, what would be the first thing that flashed into your mind? In some cases it might be a slurpee, in others it might be the iconic sign. No matter, we all have an image that would appear in our heads. The product managers at 7-11 are working hard to extend the images that we already have in order to get us to think about something else when we think about 7-11: packages.