The Pizza Chef: A Black Eye on the Industry
By Diana CoutuFeatures Business and Operations Finance
A Black Eye on the Industry
Pizza seems to be the one commodity that gets priced
cheaper every year. Personally, I can’t understand why pizza operators
would want to undercut their own livelihood.
Pizza seems to be the one commodity that gets priced cheaper every year. Personally, I can’t understand why pizza operators would want to undercut their own livelihood.
This is a tough enough business already without shooting ourselves in the foot by dropping prices to ridiculously low and unsustainable levels. What other industry does this willingly?
I can tell you that no pizzeria in Italy would dare undervalue their livelihood. Other than Wal-Mart, who can truly afford to “roll back” prices? While Wal-Mart brings in a lot of products from China, typically pizza operators can only do this with spices.
There are strict rules on food products, you can’t import cheap cheeses and meats, and I think that’s a good thing. I shouldn’t need to point out the golden rule – you get what you pay for.
I recently took a phone call from a lady who wanted a quote on a New Year’s Eve party for 800 guests. I asked her what her budget was – it was $500. I told her that we couldn’t come close to feeding that many people with that budget.
You can’t even get deli platters for that many people for $500. I’m not even sure she could hit that budget if she got hot dogs and cooked them herself. The lady then tells me that a large chain has already quoted her that price – so I did the math. It worked out to $6.25 per large two-topping pizza after taxes, before taxes it was $5.50 a pie. We don’t sell our smallest pizzas for that price, what in the world made her think that we’d sell her our large pizzas for that price?
She thought that because she was ordering such a large quantity that we should match the same price as the large chain – but the math didn’t work on one pizza, let alone 130. I told her that we have no quarrel with those who sell for less, that they should know what their product is worth, and I suggested that if her budget was only $500 and price was the determining factor, then she should stop wasting my time.
I had to wonder: would this lady dare go into a Jaguar dealership with a Cavalier budget?
Another lady called a few days later and asked if we have “2 for 1.” We don’t. We told her that we specialize in quality, not quantity. She continued to press for “2 for 1,” stating that’s what she wanted. We told her that we could only help her if she wanted great tasting gourmet pizzas, but if she wanted “2 for 1” then there are plenty of other pizzerias that specialize in quantity, and that she ought to call one of them. She became angry; she said she really wanted to try our pizza but she wanted “2 for1.”
She asked to speak to a manager. I got on the phone and asked her what high-quality items could one reasonably expect “2 for 1” but she couldn’t come up with even one item.
Somewhere down the line, this lady was conditioned to believe that pizza is worthless and therefore was sold in “2 for 1” units. She ate up precious time trying to debate a dead argument with me, all in the middle of a busy supper.
I told her that as soon as my suppliers, my utilities and my landlord gave me “2 for1” prices, I would pass on the savings. She asked for a “2 for 1” price – again. So I gave her a price on a pizza (that was twice as much) and told her she’d get two pizzas for that “one” price.
I thought it was funny, but let’s just say that I didn’t make a new friend … although she did stop wasting my time. Clearly, she didn’t want “2 for 1,” she wanted cheap pizza.
It’s as bad as it can get. Last year that same chain was offering a large, two-topping pizza for $8. So, what did they take out to make it cheaper? Where’s the profit?
What will happen if pizza operators don’t get out of their own way and raise prices to meet the higher costs of doing business? Will next year’s special be two large, two-topping pizzas for only $7.99, plus you get a free toonie back?
No wonder Italians think that the majority of North American pizzerias are an insult to an ancient craft. We’ve cheapened it to the point that many see it as worthless. It’s a black eye on the whole industry. •
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