DiBella’s Creates a Larger Footprint
At a time when signs of economic recovery still haven’t hit many of our wallets, it may come as a surprise that DiBella’s Old Fashioned Submarines is experiencing a boom.
The company isn’t sharing dollar figures, but is reporting a 50 percent increase in revenue in 2011.
Much of that financial bump for the Rochester-based chain of sandwich stores came from opening six new locations last year, enlarging the brand to 23 stores in four states.
But DiBella’s chief operating officer, James Paladenic, said previously existing restaurants, including the seven in DiBella’s hometown, saw a 10 percent increase in revenue, too.
The new year would seem to hold more of the same: DiBella’s opened restaurant No. 24 in the Pittsburgh area on Jan. 4 and No. 25 in the Dayton, Ohio, area last week.
The company also intends to open stores in Connecticut and Indiana, and in metro areas in between where it already has a foothold.
By the end of 2012, DiBella’s expects to have at least 10 more locations, spread in a crescent shape from southern New England through the Great Lakes to Indianapolis.
“At the end of the year we’ll evaluate,” Paladenic said of more long-term growth plans.
A national restaurant analyst described DiBella’s as an emerging regional brand and predicted it could easily grow to 100 locations.
“What we’re … seeing here is a very well-established older brand that has engaged growth,” said Darren Tristano, a restaurant analyst for Chicago-based Technomic Inc. He said DiBella’s is in an excellent position to use its expertise to take advantage of current consumer preferences.
“Because of the sandwich, it fits within some of the trends today for customization and portability,” Tristano said.
“More consumers are looking for affordable product that comes the way you want it,” he said.
Rochester sub fans know the DiBella’s sub is full of choices. They get to select their sandwich’s meats, cheeses, vegetables, sauces, type of roll and even temperature.
The company began as a delicatessen at the corner of Portland Avenue and Casper Street nearly a century ago when that neighborhood was dominated by Italian immigrants and first-generation Italian-Americans.
Over the years the business evolved several times, Paladenic said, focusing more on imported ingredients and then sandwiches made with rolls baked on the premises.
In 1998, DiBella’s was operating as a single sub shop in Henrietta when it added a second store in Greece.
Paladenic said Joey DiBella, the great-great-grandson of the founder, is a partner with Richard Fox in the Fox Family Management group, which has been involved since the second store was added.
The Fox team also owns 110 Wendy’s restaurants.
Tristano said restaurant chains can build revenue in several ways: expanding the number of stores, increasing sales year over year at each store, and selling franchises.
DiBella’s is doing the first two but continues to own all of its own stores.
“A lot of sandwich chains are really pushing catering because you really leverage your overhead,” Tristano said.
Indeed, Paladenic said DiBella’s has done that. Other recent or coming initiatives include:
Internal audits to ensure quality remains consistent.
Adding a line of chicken sandwiches.
Adding limited-time-only sandwiches (the beef on weck sub being offered now, for instance).
Adding a kids’ menu (look for a pint-sized peanut-butter-and-jelly sub soon).
“We realize customers have a lot of choices,” Paladenic said, but DiBella’s is striving to distinguish itself with quality.
“Other concepts out there created an awareness for subs,” Paladenic said, reluctant to name names.
But Tristano wasn’t shy about naming Subway as the dominant player in the national market.
He also noted that several regional brands, such as Firehouse Subs, Larry’s Giant Subs and Jersey Mike’s, are making their way from the East Coast to the Midwest, too.
These regional brands typically carry a higher price point (can you sing the $5 footlong jingle?), offer different flavors and have a more interesting restaurant interior than the national leader, Tristano said.
The Midwest may offer greater opportunity for DiBella’s than larger urban areas could.
“The competitors in that area may not have that Italian angle now,” Tristano said.
Paladenic said DiBella’s has chosen its new locations based on what has worked here in Rochester, including plenty of blue-collar folks nearby needing a quick lunch.
But tastes haven’t proven to be the same despite similarities in demographics.
Rochester and Buffalo DiBella’s customers prefer cold subs (70 percent of sales) to hot ones (30 percent), Paladenic said. Pittsburgh and Cleveland patrons prefer the opposite ratio.
DiBella’s is only too happy to accommodate them.