Peter Piper Pizza has frequently tried, with little success, to open in locations outside its core markets in Southwest U.S. states like Arizona and Texas. Its problem: The company’s business is too similar to that of sister company Chuck E. Cheese, at least in the eyes of customers.
“When it opens up in a new market, like Oklahoma City, it kind of looks and feels like a Chuck E. Cheese with pizza, games and bright colors,” David McKillips, CEO of the chains’ parent company, CEC Entertainment, said on last week’s episode of the Restaurant Business podcast “A Deeper Dive.” “So, Chuck E. Cheese dominates.”
CEC had an answer to this problem: Develop a new type of concept.
The result is Peter Piper Pizzeria, a fast-casual version of the chain that the company hopes can become a third concept, helping the company grow outside of Peter Piper’s core markets. CEC recently opened its first location of the fast casual in Kansas City and plans to open a second there, using the restaurants to prove the concept before deciding what to do with it.
The fast-casual features a selection of pizzas, wings and sandwiches. It does away with the buffet and introduces a selection of pastas that can be made more quickly than pizzas. The company will also sell slices of pizza at lunchtime from premade pies. There are some games—it is almost inevitable that a pizza restaurant features games these days—but the selection is limited.
The location features an open kitchen with a Roto-Flex oven, so customers can see their pizzas or wings made as they wait. There are numerous televisions on the wall.
“It won’t be competitive,” McKillips said. “Chuck E. Cheese is very much about young parents, birthday parties and celebratory occasions. This you can get 12 to 14 visits per year from the family.”
Peter Piper Pizzeria features a smaller game area but televisions and an open kitchen.
Peter Piper operates 96 U.S. restaurants, mostly in Arizona and Texas, plus some international locations. CEC acquired the company in 2014, a rare pairing of two similarly situated pizza-and-games concepts. Peter Piper has generally been overshadowed by its much larger sister chain in the years since then.
Domestically, the chain has yet to recover fully from the pandemic. The chain generated $69.1 million in system sales last year, down 1.4% versus 2019, according to data from Restaurant Business sister company Technomic. Yet Peter Piper’s sales grew 8.6% last year as customers returned to inside dining more often.
Overall, the “eatertainment” business, in which consumers visit restaurants that offer entertainment along with a full restaurant experience, has had a post-pandemic renaissance over the past year and a half as consumers unleash some pent-up demand.
McKillips said that customers in Peter Piper’s core markets differentiate that concept from Chuck E. Cheese effectively. “It leans forward in terms of sophistication,” he said. “In the markets we’re in, Phoenix, Tucson, El Paso, Peter Piper is the dominant brand.”
But it has struggled to translate that differentiation in new markets after years of trying. That requires a new way of thinking. In its core markets, CEC is working to build the brand’s presence with limited-service “express” units.
The company believes its fast-casual Peter Piper Pizzeria could become a true growth concept if it works. The location does several things differently from its main brand, such as the pasta menu and its lunchtime two-slice, one-drink offer for customers in a hurry. But McKillips believes the concept could be well-positioned to capture a lunch business it doesn’t have with either of its concepts right now.
CEC plans to spend the next several months watching the fast-casual locations closely to see what works and what doesn’t. “We have to let this thing bake,” McKillips said. “We want to make sure we have the experience right and the menu set.”
And, because this is something new, CEC can take a few risks. “We’re not afraid to go out on a limb and try new things,” McKillips said. “If it doesn’t work, we’ll pull it back. Fail fast.”