Canadian Pizza Magazine

Features In the Kitchen Ingredients
The Pizza Chef: July-August 2012

A black eye on the industry


July 6, 2012
By Diana Coutu

Topics

Pizza seems to be the one food item that gets priced cheaper every year.

Pizza seems to be the one food item that gets priced cheaper every year. Personally, I can’t understand why pizza operators would want to undercut their own livelihood. What other industry does this willingly? Besides Walmart, who can truly afford to “roll back” prices? Keep in mind that Walmart brings in a lot of products from China. Pizza operators can do this with spices but we can’t import cheap cheeses and meats. There are strict rules on food products and I think that’s a good thing. I shouldn’t need to point out the golden rule – you get what you pay for.

Shrimp_Pizza 
For pizzerias that specialize in quality over quantity, it’s difficult to keep up with the prices chain pizzerias offer. 


 

I recently took a phone call from a lady who wanted a quote on a 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 hotdogs and cooked them herself. Then she 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 said that because she was ordering such a large quantity 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.

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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. We told her that we could only help her if she wanted great tasting gourmet pizzas, but if she wanted a “2 for 1” then there are plenty of other pizzerias that specialize in quantity, and 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 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 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 for 1” 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.

I recently helped an independent restaurant complete a proper food cost on its most popular menu items and we discovered that they lost $1.56 every time they sold a chicken caesar salad. They promptly raised their prices. Occasionally when I consult with a client and show them where the money is disappearing I’m met with resistance about raising prices. Often they cite the low-priced chains as one of their determining factors for not increasing prices; the other is the growing number of frozen pizza factories. It seems as bad as it can get. Food costs have risen six per cent in the past year alone, and that’s not even mentioning the increase in labour costs. The ugly truth is that unless you’re a German frozen pizza factory, Canadian governments have no love for you and either your business will be around in 12 months because you’ve made the decision to stop being the Walmart of pizza places or you’ll be selling the contents of your location and looking for work elsewhere. Let those operators who are in a race to the bottom give money away with their pizzas. The rest of us need to wise up and get rid of the “2 for 1” pricing structure once and for all.


Diana Coutu is a two-time Canadian Pizza magazine chef of the year
champion, internationally recognized gourmet pizzaiolo, co-owner of
Diana’s Gourmet Pizzeria in Winnipeg and a member of the board of
directors for the CRFA. In addition to creating award-winning recipes,
Diana is also a consultant to other pizzeria owner/operators in menu
development, creating systems to run a pizzeria on autopilot, along with
marketing and positioning to help operators grow their business
effectively and strategically. She is available for consulting on a
limited basis. For more information contact her at Diana@dianas
gourmetpizzeria.ca.


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