Business Profile - MOD Pizza

07/11/2016 - 07:00
MOD Pizza is determined to shake up the UK pizza market with a rapid expansion plan, radical pricing strategy and focus on the community. Nathan Pearce catches up with John Nelson, UK CEO.

Controlling operations at Nando’s for over six years, John Nelson was happy in his job and had no intention of moving on, but an encounter with Charles Dunstone and his business partner Roger Taylor, saw him flying across the pond, to Seattle, to try out MOD Pizza.

It was love at first sight, and smell, and taste for Nelson, who joined the team at the beginning of 2016, ahead of the brand’s UK debut in Leeds.

The fast casual pizza chain was founded in Seattle in 2008 by Scott and Ally Svenson and will soon have over 200 sites opened across the US. It was announced in 2015 that MOD had signed a joint venture with entrepreneurs Dunstone and Taylor to launch into the UK market.

Dunstone, the founder of Carphone Warehouse and TalkTalk, is responsible for introducing Five Guys to the UK market in 2013 and since growing it to a 30-strong portfolio of sites across the country.

By Christmas 2016, MOD’s UK presence will total five sites, all of which have been carefully selected to test a different aspect of the market.

“We were keen to trial the concept in five different environments. We wanted to see what would happen in a major retail shopping centre (MetroCentre, Newcastle), a leisure park (Leeds), a destination (Brighton Marina), a city centre (Nottingham) and central London (Leicester Square),” Nelson explains.

“The one thing we haven’t tested yet is a high street or community site, which will be tested next year. We’re doing this to help determine what the best market is for us to expand into.”

As soon as the trial period is over, MOD plans an aggressive expansion across the UK, aiming to reach 10 sites by the end of 2017 and then planning to open 20/25 sites a year.

The menu has remained largely unchanged from the US model, except for a few sauces. Mayonnaise has been introduced in the UK, whilst ranch sauce, which is hugely popular in the US, is a tough seller in the UK market.

A range of almost 50 toppings are available for customers to entirely customise their pizzas, alongside a fixed menu of the ‘Top 10’ pizzas. The best seller being the Mad Dog, a combination of mozzarella, pepperoni, sausage, beef and MOD’s red sauce. Nelson’s personal favourite? The Caspian. A blue cheese, chicken, red onions and BBQ sauce creation.

It’s the pricing strategy that really separates MOD from its competitors, such as PizzaExpress and Pizza Hut. A whole pizza with customisable toppings is just £7.47 in the regions and £7.87 in London.

“We want to be really transparent with our pricing and the only reason we had to increase prices slightly in London is simply because we’re paying more for staff there.”

Pushing on MOD entering the delivery market, which Nelson sees as a trend only set to continue growing, he’s hesitant to rush into plans.

“We’re still establishing ourselves and the last thing I want to do is start putting our pizza in boxes and letting them travel for 45 minutes, meaning the customer’s first MOD experience isn’t the one we want,” he explains.

“It’s certainly a market we want to look at, and is something that I have no doubt we’ll enter further down the line. Right now, we’re focusing on perfecting the in-store experience.”

Nelson speaks proudly of the brand’s culture-based environment, placing importance on staff values and interests in the local community.

“The community aspect is such an important part of the business for us, we really focus so much of our attention on how to develop a relationship within the community, whether it’s through fundraising or partnerships with local charities,” he explains.

“Every opening we do, our first day’s sales go to a charity of the general manager’s choice. It helps engage the team as well, because they feel like they’re working for more than just MOD.”

When it comes to the wider eating out market, Nelson notes the growing trend in fast casual and innovation filtering through from independents and smaller chains.

“It’s so competitive out there and not as simple as it was 10 years ago. I’m seeing so much innovation from the smaller chains, in terms of offer, pricing and service. I think we’re entering a really challenging time in the market and I think some of the bigger chains are going to struggle in the next few years,” Nelson says.

“People aren’t prepared to queue anymore, they want what they want, when they want. How do you ensure that your model allows people to get in and out and still have some of their lunch break free? How do you make a golden food offer in a short space of time? That’s a trend that’s only going to increase.”

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