Movie Rental Store Adds Pizza Delivery

“What do you do when you’ve got empty space in your retail store? In the case of one movie-rental chain, the answer is: add pizza. Some Midwestern movie fans will soon be able to go online and order both a gourmet pizza and their favorite flick, then get them both delivered by a single driver, thanks to a creative new initiative from Midwestern chain Family Video,” according to Forbes.

“Given what’s happened in the video-rental industry, it’s surprising the dinner-and-a-movie idea hasn’t cropped up before. Ever since videos became DVDs and digital downloads brought in-home movie delivery to many consumers, the rental business has been a challenging retail niche. Of the two biggest chains, one (Movie Gallery) went out of business, and the other (Blockbuster Video, now owned by Dish Network) is struggling to survive.

Bucking the trend is 735-store Family Video, a family-owned company based in Glenview, Ill. Company CEO Keith Hoogland tells me the 34-year-old chain’s smaller retail footprint and low-price philosophy has kept the company thriving, with stores across the Midwest. Sales rose 4 percent last year and profits grew.

But there was still a problem: When more compact DVDs replaced bigger video boxes, the stores didn’t need as much space. Each of his 7,000-square-foot stores had at least 1,500 square feet or so to spare. The question was what to do with it.

At first, Hoogland thought the chain might carve out small store spaces and lease them to other tenants. But in mulling over which type of tenant would be ideal, he hit on another idea. What if he leased those spaces to himself, and added a complementary concept that would help drive the rental business?”