Photographer: Evan Sung/Bloomberg

Telepizza to Enter Mexico Market in 2018, CEO Juantegui Says

  • Pizza delivery company speeds up plan to refurbish restaurants
  • Expansion may mean Telepizza exceeds some 2017 goals, CEO says

Telepizza Group SA is preparing to open its first outlet in Mexico as the Spanish pizza delivery company steps up efforts to diversify its business by developing what could become its second-biggest market.

“We’ve spent more than a year studying the Mexican market and potential partners there,” Chief Executive Officer Pablo Juantegui said in an interview in Madrid on Thursday. Telepizza could eventually open as many as 500 stores in the country compared with the 682 it has in Spain, its biggest market, he said. “Entering Mexico is a project for 2018.”

Madrid-based Telepizza, which claims to be the largest pizza delivery company outside the U.S., has been seeking to expand abroad from the U.K. to Iran to diversify a business that still relies on its home country for about two thirds of its sales. The company, which sells 60 million pizzas a year, is also accelerating plans to refurbish its restaurants and is investing in higher-margin gourmet pizzas to help boost revenue, Juantegui said.

Telepizza’s expansion means it may be on course to exceed some of its 2017 targets, he said. For instance, the company said in February it expected to open 60-80 pizzerias in core countries this year after inaugurating 32 in the first quarter.

International Growth

“If you look at the guidance we’ve given, it’s obvious that in some things it seems likely that we’re going to be better at the end of the year,” said Juantegui. “For now we want to be cautious -- we don’t want to change our guidance.” He said international growth is greater than the firm expected and he expects that trend will continue.

Telepizza had budgeted 16 million euros ($18 million) to refurbish its 1,421 pizzerias worldwide by 2019. The company decided to bring forward this deadline after noticing a revenue surge in the revamped outlets, said Juantegui.

Sales in refurbished stores are as much as 6 percent higher than similar non-refurbished ones, he said. Telepizza now aims to revamp all of its own outlets by the end of this year and all franchised ones in the course of 2018.

An upsurge in app-based delivery services isn’t jeopardizing Telepizza’s digital market, another important pillar of the company’s sales strategy, said Juantegui.

“From the very beginning we regarded them as a channel with its own price that we can use or not,” the CEO said. In those countries where Telepizza’s brand is not well known, apps help penetrate the digital market and increase brand consciousness, he said.

Founded in 1987, Telepizza employs 26,000 staff and operates in 20 countries. The company raised 605 million euros in a share sale last year.

While the stock has risen 15 percent this year, in line with gains in the Madrid Stock Exchange General Index, it has lost 33 percent in value since listing in April 2016. Telepizza, which competes in Europe with Domino’s Pizza Group Plc, returned to the stock market after an almost decade-long hiatus, when it was reorganized by private equity companies.

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