Stevi B’s tries to get edge on competition

Stevi B’s started a marketing campaign earlier this year that stressed its hand-cut vegetables and dough made daily in the store.

“It’s one thing to tell people you do that,” said Stevi B’s President Matthew Loney, in an interview this week at the first of the new stores in Gainesville. “It’s another to let them see it.”

The changes come as the overall restaurant industry, including Stevi B’s, face declining same-store sales. The refreshed look also is being rolled out as Stevi B’s tries to expand in a growing but crowded U.S. market for pizza chains.

Pizza, the second-biggest category behind hamburgers, continues to post sales increases as a category, said Darren Tristano, executive vice president of Technomic, a Chicago restaurant research and consulting firm.

Pizza, though, is filled with more chains than any other category, Tristano said. It’s a relatively inexpensive and easy product to make that fills people up and appeals to families, he said.

“The demand is increasing as people trade down from other types of food, but there’s also very big competition with so many players in the market,” Tristano said.

Stevi B’s, which has 33 outlets, is an emerging player in the pizza buffet segment. Argonne Capital Group, an Atlanta-based private equity firm, bought Stevi B’s in 2008 from founders Richard and Robert Stoll. The brothers have since started a new chain, Cheeseburger Bobby’s.

Loney, former vice president and general counsel for Mellow Mushroom, took over as Stevi B’s president earlier this year.

The Stoll brothers created a good concept, Loney said. But the chain needed a stronger system for ensuring consistency to handle additional growth, he said.

Stevi B’s this year developed a purchasing association to help franchisees lower costs and a formal franchisee advisory council to get their input on decisions.

Stevi B’s also has updated the look of the restaurants. It created a new logo, added posters stressing its ingredients and made changes to the layout, which are featured in the Gainesville store set to open next week.

Walls have been taken down to show the dough mixing and pressing process. A window shows the proofing cabinets where the dough is left to rise.

The buffets have warming plates recessed into the granite counter-tops, instead of metal warming trays on top. New stores will feature the design, Loney said. Existing stores are phasing in changes where possible, he said

Stevi B’s expects to have about 50 stores by the end of 2010, Loney said. In addition to Gainesville, a restaurant will open near Northlake Mall in Atlanta in late October.

Much of the expansion will come outside metro Atlanta, with Florida and California key growth markets, Loney said.

Stevi B’s faces challenges. Same-store sales have dropped about 5 percent so far this year, Loney said. It’s core customers, families with incomes of $68,000 a year, have been hit by the recession, he said.

Some pizza buffet chains also have lowered prices to as low as $2.99, pulling away traffic, Loney said. Stevi B’s emphasis on quality will pay off, he said, bringing back price-sensitive customers as the economy recovers but also drawing higher-income families.

“You get them in the door,” Loney said. “You show what we’re providing and the service we’re providing, and it loses a little bit of that stigma. I think it will end up being a positive for us. We’re certainly working to make it that way.”