New POS system Boosts Same-Store Sales for Papa Murphy's

By Christine Kern, contributing writer

Company also testing online and mobile ordering

The continued rollout of a new POS system and improved operations are having a positive impact on same-store sales at Papa Murphy’s Take ‘N’ Bake Pizza, parent company Papa Murphy’s Holdings Inc. said Wednesday after reporting strong second-quarter earnings.

Papa Murphy's recently completed the 900th installation of a point-of-sale software system aimed at boosting efficiency and gathering transaction data at its stores.

More than 60 percent of Papa Murphy's "total store base" is now on the new point-of-sale system, said Ken Calwell, CEO of Papa Murphy's. The company's long-term plan is to add a feature to the sales system that allows online ordering.

Caldwell stated that the locations that have adopted the new POS system have shown improved unit-level profitability, including better management of food costs and higher scores on speed of service and accuracy. The new POS system will also set the stage for online and mobile ordering.

Papa Murphy’s is testing online and mobile ordering in about 300 locations. Even without marketing the tool yet, those units are showing a higher average check, he said.

“Those who order online tend to order more than when in stores,” said Calwell. “The consumer has more time, so it helps drive add-on sales. Mom is looking for a meal, not just pizza, so she has more time to carefully consider what she’d like to add.”

Meanwhile, the company remains ranked No. 1 by consumers. For example, a recent report by Technomic, the food-industry research firm, rated Papa Murphy's No. 1 overall, Calwell said. It also showed that Papa Murphy's ranks No. 1 among baby boomers and members of Generation X.

"Our development remains on track," Calwell said. He said Papa Murphy's saw "solid sales momentum" in the second quarter and is poised to roll out "new initiatives" later this year and into 2015. The company will give updates of its progress in the coming quarters, Calwell said.

 The Vancouver, Wash.-based operator recorded a widened loss of $1.6 million for the June 30-ended quarter, but that largely represented expenses related to its initial public offering in May.

Calwell said a better-than-expected increase in same-store sales at company-owned restaurants, of 5.7 percent, indicates that the chain is on track to see domestic comps grow at least 2 percent for the fiscal year system wide.

Papa Murphy’s is mostly franchised. Of its 1,436 locations system wide, 67 units are company-owned.

Franchised locations recorded more modest same-store sales growth, of 1.2 percent, for the second quarter Calwell said the disparity indicates the effectiveness of initiatives to improve operations, which company locations and certain “early adopter” franchise operators have put in place. For example, all company-owned locations have rolled out the chain’s new POS system.

Founded in 1981, Papa Murphy's went public in May, making its costs and profits public for the first time. It operates more than 1,400 franchised and company-owned stores in 38 states, Canada and the United Arab Emirates. Most of the company's stores are operated by franchisees.