Wa Dave’s situation is not exactly the same as most so to compare is a little misleading. Sure fuel issues are similar but his wage costs are way higher due to the low employment/high wage situation he has outlined many times before. He also have significant problem with getting drivers (good or bad quality) as well. Dave has talked about being forced to stop delivering (due to the labour problems) whilst this thread is about people considering stopping delivering - that is a much different situation.
I have and equal delivery/carryout split in terms of order numbers but I offer buy on get one for $1 on large pizza carry outs. I don’t charge a delivery fee either its costed into the price. We have a relatively small delivery area (typically drivers do 4 deliveries an hour) and I know my average delivery costs. We also take a record of driver mileage and so I know how much I pay and the approx costs for the drivers. I suppose if you compare my delivery price against the carryout price then I do charge a delivery charge. Either way customer get a great pizza and if they wan delivery they pay for it - if they want to come and pick it up - they get it a little cheaper.
Will people still want delivered pizza/take away food - I’m pretty sure they will - why:
They still want the convenience of getting someone to deliver their food and
If fuel costs are high for us - then they are high for them as well.
All food is going up
I change my menu 4 times a year and every time I am pushing up prices a little.
Some stores have never delivered, some will stop, some will start - each to their own but always make sure you know the cost of the service you charge and make sure you review and change on a regular basis. For me offering choice is really important.
speaking of frustration, i have a new driver today,first delivery,i say just head north on this road right outside the front door,he gives me this strange look and says"which way is north" .i cant stand it…
Got me thinking. Based on quick data from records I have at home, in 2007 here are the numbers:
Driver wages equal ~$3.40 per delivery order. This does not take into account that they do all the dishes, fold the boxes, stock the coolers, answer the phones etc, all of which would need to be done anyway, so let’s say the delivery-only portion of the work is about $2.75 per order.
Gas, vehicles, repairs etc, cost about $1.05 per delivery.
Insurance for the cars is another 35 cents per order.
All in all, each delivery costs me about $4.15 above what a carryout would cost. I would have to have another one or two counter staff to do the business if it were all carryout though, so deduct about $1.50 per order. I would say the difference might be in the range of $2.50 to $2.75 per order to do delivery vs all carryout.
Our delivery charge is already $2.00 I guess I’ll raise it to $2.50
Thanks for making me run through the excercise again. I still hope all my competitors quit delivery… or better yet just quit.
Has anyone thought on how a customer could feel when they pay $15 for a pizza to pick up at the store while another customer pays the same $15 to get it delivered free?
It’s just a thought that came into my head after reading where some places offer free delivery and they say they have costed it into the price. If this is so does this mean the carry out customers are getting ripped?
No fingers pointed or any offence intended but the thought crossed my mind on how I would feel as carry out customer paying the same as a delivered pizza.
I have no clue how it is in Australia (I would like to visit and find out) but my impression is that now, in the US, a delivery charge is the norm rather than the exception. There are some shops that are resisting a delivery charge or who do so much delivery vs carryout that costing it in works.
Delivery expense runs about 7.5% of sales using the numbers I posted above. I could add that to my pricing, but it would both penalize carryout customers and it would make large orders disproportionally more expensive. My delivery expense really is more order count than order total based. Having a flat fee per order better reflects that than increasing prices to include the expense in the base price.
The customers who are most cost motivated order from my low cost / low quality competitors. Those who carry out from us based on cost realize they are also saving some on the tip. Our average driver tip is around $3-4. By the time they pay a $2 delivery charge and a $4 tip the savings on a small order is meaningful…
But, they also have to take 20-30 minutes to drive and burn $4 gas to get that savings. By the time they start the car and drive to my store and back again they may well have burned $2 in gas in a typical SUV!
Seeing I’m the only one who mentioned I costed into the price - that’ll be me then!
In my environment not having a delivery charge sets me apart from most of my competitors. We are at a premium price point in our area and offer a very good delivery service better than any around - our average deliveries reach customers around 22 minutes from the order being taken. I offer a very strong carry out deal as well and I send out a lot of menu’s every month which highlight all of these offers.
I’ve no issues with delivery charges at all - we’ve just decided to do it this way. We make our prices very obvious to customers and it seems to work for us.
I don’t really think that most people would drive to the shop with out a) looking at the menu and b) having considered the prices for deliver/carryout beforehand.
Not specifically thinking about you as others have said in other posts that they do free delivery as well.
Your point that you have strong carry out deals I take are not for delivery, so is this where the difference is between pick up and delivery? Do you have the deal specific for carryout only and not for delivery? If so then that is clever marketing.
I often considered only having our deals for carryout only but the mentality nutured by the previous owner was to give deals on everything to every order, something we have been slowly winding back. I like the idea of deals for carryout only.
Our deals are valid for delivery or carryout but carryout customers who do not have a coupon can get our “carryout special” if they ask for it… $2 off the order. That makes the difference between a carryout and a delivery $4 counting the delivery charge.
Wa Dave…first time I have seen such a sense of frustration in your posts. Today is my day to go visit other places and I was thinking about your description of your drivers several times while driving around. “Knuckle draggers?” So apt and so funny. You may be frustrated but you gave me a good chuckle all day.
Now I don’t mean to start a political discourse with anyone with this next comment but I am interested in your answer. From what I know and have read about your country it appears it is further down the road to Socialism than the U.S. Do you think your employee problem and the “knuckle dragger” problem is, in part, due to a government with Socialistic tendencies and maybe a lot of people can afford to kick back because they know the government will take care of them? I remember when I was a kid (many, many years ago) there was not so many government agencies eager to support you. We either got out there found some work of some sort and at whatever pay we could get until things got better or we were out of luck. I remember applying for a single job opening (box boy) at a local supermarket and I applied along with several other guys some of whom were my friends. I got the job because I went back each morning and each afternoon to check status with the manager and I got the job over the others. As government moves in to make sure nobody fails at anything I think it tends to reduce incentive. What do you think? Is this part of the problem in your country?
Wa Dave, you said you might be looking at a whole new picture for the pizza business in your country. This may be crazy but I was thinking. What if you had regular routes going in the same direction at specific times each evening? if things get so bad for everybody and there is virtually no delivery then would people accept some regimentation? We go North to X area every evening at 6 pm. and 8 pm. Maybe the areas that you deliver would change or some would have to be eliminated. If there was a route and people ordered in time to make the scheduled delivery time you could load more pizzas into one delivery and, theoretically every delivery would have multiple stops. Maybe transaction time could be reduced for each stop so that the product is at a good level of quality. Pre-pay? guaranteed payment, guaranteed and predictable deliveries. Fewer drivers? More money for each driver. Sounds like a dramatic departure but if the alternative is perhaps no delivery maybe people would adapt??? I have never had any experience with hot trucks but maybe a small pick up with a hot box can keep a large number of pizzas at a reasonably high level of quality for a long enough time to make many more stops per outing.
Not sure if this makes sense but thought I would throw it out there.
I did some calculations today and also figured we should be at 2.50 per delivery. We are at 2.00 now. then I called some of the pizza guys around us. Dominos is 1.99. An multi-unit indy went up to 2.00 from 1.50. One of the other guys (forgot which) went to 2.00.
We have for some time had a system of unemployment payment (commonly called getting the “dole”) where people who are unemployed are paid a living allowance. For the most those getting it at the moment with our record low 3.4% umemployment, are the unemployable, ie those who don’t want to work and do everything to not get a job. There is also assistance for single mums, permanently disabled, old age, sickness etc,plus other benefits for low paid. These geta 2 weekly payment, reductions on rates and taxes, public transport and free health care.
Yes it is a style of socialism but nowhere near that of the UK or France or far reaching Socialist / Communistic states, but none the less it is still an area where those who don’t want to work can rort the system.
In the main our area of concern is that with the low unemployment and ridiculous wages paid to the resources industries (mining and the like) is that people are not wanting to work for the lesser paying jobs such as the hospitality industry. Most staff available are really the bottom rung of the ladder and hence the “knuckle dragger” comment. They tend to be needed to be spoon fed, are not self starters, lack initiative and only do the minimal they have to do.
Yes there is frustration in my comments and it builds daily when you cannot get staff and when you have to put up with the ones you have got. If you criticise them they are likely to walk out because they know there are jobs a plenty to choose from, so unfortunately we have to accept levels that we normally wouldn’t just to keep staff. We have to pay more, give them more incentives to stay and generally accept that they will only do the bare minimum and then not at a good quality.
McDonalds and similar corporations are now bringing in people from 3rd world countries on special “457 Visas” to fill positions in their stores. Unfortunately as a small business we would be precluded from doing this as there is a lot of paperwork involved plus they have to stay employed for 3 years to qualify.
Joined: 21 Aug 2006
Posts: 671
Location: Currambine, Perth, Western Australia
Re: Any small guys considering stopping delivery
Has anyone thought on how a customer could feel when they pay $15 for a pizza to pick up at the store while another customer pays the same $15 to get it delivered free?
It’s just a thought that came into my head after reading where some places offer free delivery and they say they have costed it into the price. If this is so does this mean the carry out customers are getting ripped?
No fingers pointed or any offence intended but the thought crossed my mind on how I would feel as carry out customer paying the same as a delivered pizza.
Gee, I must have too much time on my hands.
Dave
Actually the way I look at it in my business is the delivery orders are subsidizing the carryout orders. If not for my delivery sales I would have to charge a MUCH higher price for my pizza in order to cover my rent and utility bills. Maybe I need to add a carryout fee so I can lower my price to reward my delivery customers who make it all happen! :shock:
Big Dave (Ostrander) and I were just recently discussing this topic and he puts the cost at something around $4.00 for an average. This is based on the number of deliveries a driver can make divided into the cost of gas, his/her wages, insurance and benefits. If the customer picks the pizza up at the store, the cost will be gas plus wear and tear on the car (mileage at $0.59 per mile), then add the cost of the consumer’s time. To give perspective to this, I live 4-miles from our nearest Pizza Hut, that’s 8-miles round trip or 8 X $0.59 for a total vehicle cost (not counting my time) of $4.72.
Tom Lehmann/The Dough Doctor
I come up with similar numbers… except that if I did not deliver and had no drivers on the crew, I would need to have other people on the crew to handle the side work they do and additional front counter help assuming we are talking about a model where we do the same business, but carryout. I calculate that I would still spend about $1.50 of that $4 bringing the marginal cost of delivery back into the $2.50+ range.
In our shop driver side work is dishes, box folding, cooler stocking along with some phones and front counter. We do about 70% delivery at this time of year. If we did the same daily sales with 100% carryout, I would need a full time front counter person and a second during the rush where right now we can cover the phones and front counter from the kitchen.
I guess my point is, that businesses can not count on saving all the expense assiciated with some part of the business when they give it up or make a change.
Delivery or no delivery is one of those things that you must assess for your own store, you just can’t make a blanket statement or rule, but if I were opening a new store, and I had a viable option of not delivering, I think I would have to give it a lot of thought.
Tom Lehmann/The Dough Doctor
I’ve always worked on the principle of not having all my eggs in one basket . This way you stand a chance of backing the ‘better’ idea rather than (as my luck would have it) putting everything in not so good idea.
Since I’ve opened I’ve always had a strong carry out offer as being a high value brand a lot of people look at my prices and think we are too expensive. I often get told “your prices are high but then again you get waht you pay for and our pizza’s are great”. My answer is (currently) well if you come and pick it up we do buy one get one for $1 that way people get to try the quality and see for themselves.
Dave - as I’ve said before your situation is much different. If you are likely to be forced to stop delivering then don;t even think about trying this because if you do stop delivery you want to maintain as higher price as you can.
Re the question about is delivery dead in the long term - well there is lots of focus on our costs but we need to keep in focus the customers costs (not necessarily money) - yep their fuel costs have gone up as well so it costs them more to pick it up, they also have to travel (time they could be doing something else), maybe bring the kids with them, put coats, shoes etc, driver back, pizza will be colder when they get back as they won’t have a bag etc etc. Yep the cost is more but then again everything is costing more. If anything they will just stop buying takeaways full stop and focus on cooking themselves - but then again we know that won’t happen for a while!!
Thinking real hard about not delivering? Drivers just really ticking me off with their excuses! I have one driver that is unbeleivably awesome in his attitude apptitude and reliability, another, that is good, but only wants to work one day a week! The rest are always complaing not enough hours then trying to get someone else to close for them, calling 10 min before a shift saying their car is broke! i have just about had it with these overindulgent morons. They avg 18-20 dollars an hour for 4-5 hour shifts. These are the adult ones i have never hired any under the age of 23 and most have been in their 30s. business is aprox. 33% dine in 33% take out and 33% delivery.
