i am considering stopping delivery all together because since gas has gone thru the roof my C/O business has jumped, while my delivery has dropped seems that everyone is p/u my c/o special(Large 1 Topp $6.99) will definatly help with labor
You stole my thoughts right out of my confused head.
With all the hassel of getting and retaining drivers, the increased amount of delivery reimbursement to drivers and all the other sh1t that goes with it I am seriously considering stopping delivery. Beacuse over here pizza delivery is a part time / casual job the majority of the knucle draggers don’t give a damm about putting effort or thought into the job. Plus they know that they won’t be fired because it is near on impossible to get replacements.
I waste more time on fixing delivery problems than anything else - drivers calling in at the last minute with lame excuses why they can’t come in, placating customers who expect/demand their delivery in ridiculous times thinking they are the only ones who want delivery, fixing stuff ups by drivers, trying to hire drivers, wet nursing drivers who are short in common sense, and the list goes on.
Only last week I caught up with a pizza owner who 4 years ago won the world pizza title. He told me that he stopped doing deliveries about 5 months ago when petrol had a big price hike. He had 8 drivers on a Friday night. He told me that 90% of the problems in his operation were directly related to drivers with taking the wrong order, leaving Garlic bread or drinks behind, slow/late deliveries, continually $tuffing up duties in the shop etc.
He said once he stopped deliveries and got rid of his drivers mistakes reduced to almost nil, customer complaints ceased and store functioning improved out of sight. He also said sales dropped 10% but most of this was covered by the wages paid to drivers.
This got me thinking and looking at my business in a different way. We are advertising this week for the last time for new drivers. If we get no takers then we commence our wind down plans. As it is we are unable to do deliveries on any one night of the week or have ridiculaous delivery time due to no shows by drivers so customers are getting used to coming down and picking up their order. Luckily the press always has articles about the drastic shortages of staff in the eat/prepare out of home industry so they understand a bit.
First we have to get our new 8 “International” Gourmet pizzas up and running which will bring in more dollars per sale as well as a better profit return per sale. Then we have to get our new dessert pizza range moving. Once we do this we will make our place where pizza eaters will want to come to for their pizzas. We are making a range of unique gourmet pizzas that no-one in our area does or will compete with. Our area is highly cashed up and people are not afraid to spend on decent fare, in fact they are looking for exactly what we are launching. Trial tastings have had spectacular responses. Once we get these up and running we will then be a “destination” place where people will go for their pizzas.
Then we can drop deliveries and end the headaches and hardships they bring.
We anticipate 3 months before we implement NO DELIVERIES and no more whinging from me about this pore point subject.
Dave
i am sure that many here have wondered the same thing. in some places it may be the right thing to do. i would be very afraid myself to do it. unfortunately i am in a downtown area where the perception is, that there is no parking, thus keeping take out to a minimum. we have done take out only while we had to cover for vacations for about a week at a time. sales dropped by 50% to 60%. many ppl just wouldn’t pick up for fear of not finding parking.
with that said, if i only lost 10%, i would consider dropping delivery too. boy, would it make life easy.
try going without delivery for a week or two and see what happens, then you can make a choice.
I’ve noticed that our deliveries have dropped considerably. But since we’re small time, our driver or drivers can always stay busy inside the store as well. We haven’t lost any transactions, but on the contrary, we’re growing by leaps and bounds.
It doesn’t sound like a bad idea, but I’ll wait and see how it plays out.
Yes, I’m considering it. It’s only 15% of my business and causes most of my aggravation. Hiring drivers is not easy or fun. Maintaining them is very difficult even when they’re making good money. Most 18 year olds that come in don’t have a good enough driving record. If we get a driver that’s 25 or 30 they’re usually just looking for a little extra cash for a short period.
Because of our geography we have fairly long average runs. It’s costing me just about $7.00 to deliver an order right now including labor, fuel, payroll taxes and insurance. Our average delivery ticket is $21.50 before delivery charge (the lowest of the three services). That’s about $9.25 gross profit after food, labor, CC expenses and advertising. Add the $2.50 delivery charge and we’re at $13.25. After costs, I’m only netting $4.00 per order. It’s not enough, for me, to deal with the aggravation any more.
90% of the time that I get called in on an off night it’s because delivery times are running long and they need help driving. I’ll need to take 1 or 2 to get them out of a jam. If I put on another driver the orders will get split evenly. That’s going to upset my existing drivers. It’s between a rock and a hard place.
I’d like to go talk with the other 3 indies in my delivery zone. I know they’re dealing with the same issues and we’re all still delivering to compete with each other. If we all agreed to stop it would probably be a win-win. I’m not entirely certain if doing something like that is legal though… it looks like a cartel.
Even if we stop delivering for dinner, we will still offer the service for lunch. $100+ orders make deliveries during that time worth it.
this thought runs through my mind every day.
Some days I wish I could stop doing deliveries but it is 50% of our business so it aint gonna happen. The last 6 months I dont usually have to much trouble finding drivers as they average about 15.00 per hour. My problem is keeping up on the busy nights but I guess that is a good problem to have
I dropped delivery in my new shop, and I haven’t felt better about any decision I have made in 20 years of working in pizza. I even had a fleet of my own economic delivery vehicles, and that didn’t change my mind at all. It only released me of the stresses related to delivery.
No more concerns about fender benders, no more complaints that my driver cut someone off, no more insurance stuff, no more gasoline bills.
I would like to say I will never deliver pizza again (I wish I could read the future though), but there would have to be some serious changes to make me ever even consider the thought again.
With the “actual” cost of delivering a pizza pushing the $5.00 mark, it is awfully hard to justify deliveries anymore. Lets see, a $10.99 or even a $16.00 pizza plus a $5.00 delivery charge AND a $3.00 tip that is a hard sell to your customer. We are beginning to see more stores introducing take & bake as an alternative to delivery. If you need a pizza for a party tomorrow night, pick up one of our T&Bs today and have it ready when you need it tomorrow.
Tom Lehmann/The Dough Doctor
TAKE-N-BAKE IS THE FUTURE!!! YAHOOOO!!! Lol, sorry all. It had to be said, and it had to be said by me, hehe!!
You are Starting delivery this week right?
Actually no. We were going to. The email that I sent out yesterday was a replacement for the “We are DELIVERING” One I was working on. With the rising fuel costs, etc forget it. Plus I did alot of research and found that it really doesnt make sense to do it. People expect to pick up from us. Why change the plan now I figure. Who knows, it may be something that we look into in the fall. But not right now.
I sure hope all my competitors stop delivery!
Pay what you have to get drivers.
Charge what you have to for delivery.
The same gas prices that take a bite out of us are making customers prefer that we do the driving. They will pay for the service; don’t be afraid to charge them.
Tom,
The cost of delivery has to vary shop to shop. How do you come up with around $5, if i may ask.
How much does it cost you for a pick-up? What
For me Tom was spot on with his cost to deliver.
We pay our drivers $13 per hour plus car allowance of anywhere between $2.50 to $4.00 per delivery drop.
If a driver does a local delivery and it takes 15 minutes then it is $3.25 for the hourly rate plus $2.50 for the car allowance for a total of $5.75. We charge $5.50 for this delivery, thus losing 25 cents on the deal. If they are away longer then the loss is greater. We only recently increased our delivery charges by 50 cents which all went to the drivers.
If some picks up we get the full tote odds for the pizza as all the costs for staffing are built into the price.
The question is - Why should we get a lesser return on delivery than for shop pick up?
Every thing we cost into our business is for making a profit yet we accept doing deliveries at cost or for a loss. The brick only recently fell out of the sky and hit me on the head about this. Delivery is a service factor that should have a profit return. If we did everything for zilch return then we would be broke in minutes. Taxis, transport companies etc deliver at a profit (even suppliers are building this in aa a fuel surcharge) yet we are in this mentality that we should “provide” this service free, at no profut or at a loss.
I am now at the stage of sooner tahn later for stopping deliveries.
Dave
wa dave
Joined: 21 Aug 2006
Posts: 665
Location: Currambine, Perth, Western Australia
Re: Any small guys considering stopping delivery
What wrote:
Tom,
The cost of delivery has to vary shop to shop. How do you come up with around $5, if i may ask.
How much does it cost you for a pick-up? What
For me Tom was spot on with his cost to deliver.
We pay our drivers $13 per hour plus car allowance of anywhere between $2.50 to $4.00 per delivery drop.
If a driver does a local delivery and it takes 15 minutes then it is $3.25 for the hourly rate plus $2.50 for the car allowance for a total of $5.75. We charge $5.50 for this delivery, thus losing 25 cents on the deal. If they are away longer then the loss is greater. We only recently increased our delivery charges by 50 cents which all went to the drivers.
If some picks up we get the full tote odds for the pizza as all the costs for staffing are built into the price.
The question is - Why should we get a lesser return on delivery than for shop pick up?
Every thing we cost into our business is for making a profit yet we accept doing deliveries at cost or for a loss. The brick only recently fell out of the sky and hit me on the head about this. Delivery is a service factor that should have a profit return. If we did everything for zilch return then we would be broke in minutes. Taxis, transport companies etc deliver at a profit (even suppliers are building this in aa a fuel surcharge) yet we are in this mentality that we should “provide” this service free, at no profut or at a loss.
I am now at the stage of sooner tahn later for stopping deliveries.
Dave
Pizza Pizzazz - Real Pizzas, Unreal Taste
Are you sure that deliveries give you zilch return? Your above example shows a delivery putting 25 cents less profit in your pocket than the same order as carryout. Is your marginal rate of return really only a quarter? Also consider that your carryout business will now need to carry the complete burden of covering your fixed costs. Are you sure that you can afford your rent, utilities, insurance ect increasing as a percentage of sales. There’s a lot to think about when considering dropping delivery and be sure you analyze the benifits as well as the downfalls completly.
Paul, what I was aluding to as a zilch return is the fact that we don’t directly profit fom delivery in the way that we do on everything else we sell/provide. We price pizzas, sides etc for a profit return yet we price delivery at an at cost (or less) price, hence the zilch comment. The 25 cents is only an example where others we lose $1 or more, so yes the marginal does concern me. I also do not understand the mentality of accepting less profit for giving customers a delivery service while from those who come in and pick up we get the full profit margin. Why should those who stay at home and get it delivered cost me money? I know we have the option to increase delivery fees to offset this but they complain already at the cost (so if we increase it more then we may lose this customer anyway).
I take your point that discontinuing deliveries may have an adverse effect on our takings but we may be forced into stopping deliveries anyway as we just cannot get drivers. Over the next month I have one driver away for two weeks and he does Monday (sole driver), Friday (one of only two drivers we now have) and Sunday (same as Friday), another driver (Saturdays only - one of two) will be away for 3 weeks on training for his full time job, plus the probability of our other Friday and sole Tuesday driver leaving soon as he commences full time employment next week after finishing a 2 year electronics course. We well may be left with no available drivers for 70% of our delivery times. All drivers are talking about how much it costing them in fuel now so I think our hand will be forced on the future of deliveries.
Also petrol prices are tipped to go to $1.80 per litre ( $8.20 a gallon) over the next few weeks after the U$142 a barrel crude oil price hit last night, so I cannot see anyone wanting to start doing deliveries when they have to fork out this much for fuel. Likewise I cannot see customers accepting another $1 - $1.50 increase on the delivery fee.
We have been tracking delivery ratio to total sales and it varies from 20 - 28%. We have also logged the number of customers who come and pick up when they wanted deliveries on the nights that we have been unable to have a driver on and this is about 85%. If the pick up instead of delivery ratio stayed this way I would drop deliveries immediately as we would probably only drop less than 5% of our total business but in saying this I don’t have a crystal ball and all I could hope for is that our product is so good that the customer would come and pick up rather than accept an inferior product just so they can get it delivered.
As I said in my original post on this that we are in the process of launching a range of 8 “International” flavour/theme gourmet pizzas plus desssert pizzas which will give us a niche to any other pizza outlet in our or surrounding area. Hoefully this will draw people to us regardless if we deliver or not.
I guess I’m in the lucky situation that we are not reliant on delivery to the extent of others and definitely not in the same boat as you are, Paul with the amount of deliveries you do. If I was then I would be very, very hesitatnt to stop deliveries.
This rapant fuel price increase may just force the hand on the whole industry in Australai to re-look at delivery for pizzas. I cannot see how the likes of PH, Domino’s or Eagle Boys can sustain a delivery service at their prices and also still manange to attract and pay drivers drivers a reasonable pay rate. We may very well be seeing an new era emerging in the not too distant future.
Dave
My question is if your food and labor costs are 60% ,you are already adding delivery labor in to your cost. If you say it cost $3.00 in labor to delivery a pizza, that labor has already been added to your costs. It cost you money to have someone answer the phone. The only increase would be if you pay for gas. My drivers get $6.00 an hour & a $1 delivery charge, the gas price is not hurting me. My drivers are still makes good money ,they use the $1 per delivery to offset the price of gas , they still make $15-20 an hour. I can see stopping delivery if you are doing 20 per day but maybe trying to increase delivery is the way to go, the more you delivery the less it costs you per day. What
I think you need to look at it from a different perspective, What. Compare the per order cost of a carryout pizza to the per order cost of a delivered pizza separately.
The labor costs of taking the order, making the order, and putting together the order are the same. Completing the transaction (taking the money) is the only item labor activity that is shared by both delivery and carryout… and that is maybe 2 minutes. Delivery is on top of those costs as you have an employee sitting in his car for 10-15 minutes for each order.
I was thinking that maybe the AUD$ was like 200% of the US$ to account for that gas price so I looked it up. They are almost EQUAL! Yikes!
We’ve never delivered and only a small number of people that call even ask if we deliver now. They know they’re getting a good pizza and they’ll come in for it. One guy mentioned that his little kid calls him cheap when he goes elsewhere now, so he is buying less of the cheaper pizza. Delivery at 4.50 / gal is tough to even think about.
We have limited parking so we’ve thought about running pizza to the car since everyone has cell phones now. But that means the pizza has to be done on time, they have to pay in advance (unless we get a wireless card reader), etc.