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McDonald’s Tries Taking Piece of Pizza Pie

August 28, 1989

EVANSVILLE, Ind. (AP) _ McDonald’s has flipped billions of burgers and tossed chef salads for the masses, but now it’s toying with pizza-craving palates in a move aimed at giving Pizza Hut and Domino’s pepperoni heartburn.

The latest addition to McDonald’s menu is a 14-inch pizza, served as an experiment in a few test markets. It’s designed to woo families and couples, who might not normally frequent the fast-food giant for supper.

So far the pizza made of quick-cooking crust and fresh toppings seems to be getting good reviews, partly because it’s ready in a few minutes, faster than fastest Pizza Hut or Domino’s pizza car.

The experiment began July 10 at a McDonald’s in Evansville. Now 16 stores in Evansville and nearby Owensboro, Ky., are serving McDonald’s Pizzas daily after 4 p.m.

McDonald’s won’t say how sales are going and the company hasn’t decided whether the pizzas will earn a permanent place on the menu.

″It’s very preliminary testing at this point,″ said Terri Capatosto, a spokeswoman at McDonald’s Corp.’s headquarters in Oak Brook, Ill.

Ms. Capatosto said pizzas aren’t sold until late afternoon because market research indicates pizza is eaten by families or couples, usually at dinnertime. She declined to explain why the product was being introduced now.

″We tested salads for 12 years before we rolled them out nationally last year,″ Ms. Capatosto said. ″We tested McNuggets for two years.″

Fast-food industry analysts said they weren’t surprised by the McDonald’s pizza experiment, partly because the company has a history of menu innovations to lure new customers during slack hours.

″Their main day business is lunch and breakfast is pretty successful,″ said Robert Bernstein, who follows McDonald’s for Edward D. Jones & Co., a St. Louis-based investment company.

″Their evenings aren’t as crowded,″ Bernstein said. ″Let’s say it’s not as strong as they would like it. Chicken and burgers are finger food on-the- go. Pizza food is sit down and enjoy the evening meal. They think that could improve their overall business.″

The pizzas come in four varieties - cheese, pepperoni, sausage and deluxe, which includes pepperoni, sausage, green peppers, mushrooms and tomato slices. Prices range from $5.84 to $9.49.

Test stores have been remodeled to include a special ″Pizza Shoppe,″ where customers can watch employees spread the ingredients on ready-made dough brought in from bakeries.

″It’s weird to go into McDonald’s and order a pizza,″ said Julie Bales, a 16-year-old customer from Owensboro munching on a few slices of pepperoni pizza. ″But you don’t have to wait. I only had to wait about three minutes.″

″People hang out here, and you have to buy something to stay here,″ she said. ″You might as well get pizza.″

A friend, Amanda Hagan, 16, of Owensboro, said she also sampled the pizza.

″That crust tastes kind of like cardboard, but I like the topping,″ she said.

Rene and George Jones of Rockport, Ind., said they were pleasantly surprised by the taste.

″It’s in between frozen and the kind you buy at Pizza Hut,″ said Mrs. Jones, 25. ″It’s a lot better than frozen for what you pay.″

Jones, 31, said ″It’s not as spicy as other pizzas. But it doesn’t taste greasy.″

McDonald’s experimented with small individual pizzas in test markets a few years ago, then evidently dropped the idea. This is the company’s first foray into large pizzas aimed at attracting more than one eater.

Regardless of whether McDonald’s Pizza becomes a permanent item, the tests are enough to have the giants of the pizza-restaurant business worried that McDonald’s, with 8,300 stores nationwide, could grab a piece of their pie.

″We certainly don’t take McDonald’s lightly,″ said Roger Rydell, spokesman for No. 1 Pizza Hut Inc., a 7,000-chain network with sales expected to reach $3.2 billion this year. ″It’s an enormous company with tremendous resources. We’re going to have to deal with it and we’ll be fierce competitors.″

Rydell said Pizza Hut has prepared a marketing plan to deal with the competition.

″We would not want to tip our hand,″ he said. ″But we are going to treat the tests in that particular market the way we treat any encroachment.′ ′

Domino’s Pizza, Inc., ranked No. 2 with 5,020 outlets and expected 1989 sales of $2.1 billion, also is watching the McDonald’s experiment closely, said Michael Raymond, divisional vice president of marketing.

″Any time you have a company the size of McDonald’s with the marketing clout McDonald’s has, you have to go on full alert,″ Raymond said.

But he said McDonald’s isn’t considered a direct threat, partly because Domino’s has concentrated much of its strength on pizza delivery to homes and offices. McDonald’s doesn’t deliver pizza as part of its experiment, while Domino’s, Raymond said, is ″a phone call away.″

End Adv for Sunday Aug. 27

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