Finance

Pizza chain collapses: Price wars continue as smaller operators’ dough gets burnt

Eloise Keating /

Renowned WA pizza maker Theo Kalogeracos

A popular Western Australian pizza chain has collapsed into voluntary administration.

As the price war between Australian pizza chains continues to wage on, Giovanni Maurizio Carrello and Mathieu Tribut of BRI Ferrier were appointed administrators of Little Caesars Australia on November 29.

The first meeting of the company’s creditors is scheduled to take place in Northbridge, WA, on December 10.

Little Caesars Australia operates three pizza restaurants in the Perth suburbs of Mundaring, Leederville and Hillarys.

It appears the restaurants are still trading, with the Little Caesars Facebook page updated this week, although a planned store in Victoria Park does not appear to have opened.

The family business was founded by pizza chef Theo Kalogeracos and his wife Elizabeth in 1996 and is not connected to US pizza chain Little Caesars, which opened its first Australian store in Sydney in September.

Carrello and Tribut have also been appointed administrators of another company, Theo & Co Australia, the director of which is Kalogeracos.

A meeting of creditors for Theo & Co Australia is scheduled to take place at the same time and location as the creditors’ meeting for Little Caesars.

According to an entry in the Mantra business directory, Theo & Co Australia operates the Little Caesars restaurants and has estimated annual revenues of $2.4 million.

SmartCompany contacted Little Caesars and BRI Ferrier but did not receive a response prior to publication.

The administration of Little Caesars comes as the competition in the Australian pizza industry continues to heat up.

IBISWorld predicts revenue growth of 2.3% in the local pizza industry, from $3.5 billion in 2013-14 to $3.9 billion in 2018-19.

Pizza chains Domino’s, Eagle Boys and Pizza Hut have been locked in an ongoing price war, with a group of 80 Pizza Hut franchisees failing in July in their bid to stop parent company Yum! Restaurants from dramatically dropping prices.

Jason Gehrke, director of the Franchise Advisory Council, told SmartCompany at the time, the “pizza wars” in the US are well-documented.

“And in a price war, the race to the bottom means that only those with the deepest pockets survive,” Gehrke said.

Little Caesars Pizzeria Perth from webmediagroup on Vimeo.

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.