Head to Head Competition in Pizza Restaurants

Chipotle (NYSE: CMG) and Buffalo Wild Wings (NASDAQ: BWLD) seem to be going head to head in their foray into the pizza business.

Chipotle is investing in a Colorado pizza chain called Pizzeria Locale. They were quiet about their original interests, with Founder Steve Ells giving a low key update saying “we’re seeing the traffic increase and we’re seeing patterns that are very similar to what we saw with Chipotle in the early days and we find that to be very encouraging and so, but we’re not disclosing volumes.”

The first location of Pizzeria Locale was opened in Denver in May 2013. The partnership was not shared publicly until December. With the news came an increased interest in the restaurant with a line out the door the following day. Their dough is made from scratch and they use only fresh ingredients much like Chipotle. Their menu includes classic pizza choices or customers can make their own. Pizzas are cooked in a gas and infrared rotational oven with the cook time at just two minutes.

Meanwhile, Buffalo Wild Wings has been more public with their relationship with PizzaRev. They opened their first franchised location with a press release detailing their connection. That restaurant was opened in Minnesota. There are also 8 company owned locations in California. More are slated to be opened in Minnesota.

At PizzaRev, customers ‘build’ their own pizzas. Homemade dough and 30 fresh toppings are the building blocks for the pizzas. The pizza is made in front of the customers using their selections. It is then cooked in a 900F stone-hearth oven. It cooks in less than 3 minutes.

Investors look at each of these pizza ventures as a means to keep the growth going in the right direction for both Chipotle and Buffalo Wild Wings. Both stocks have performed very well over the last year.

Posted on July 16, 2014 at 10:00 AM