Thank the Lord he gave me a great week last week, second highest week since i opened. Crazy good lunch today, when i left the store at 5 both phones ringing and people comming in, have a prepaid cattering job(good one) for Thursday. I just pray that it keeps up. But who knows, my brother could call and say it went dead. Im slowly figuring out that it is what it is.
Weve been goint strong since 1972, and have never seen a drop in volume like the one which is happening right now! We are approaching a time in which we will have to take desperate measures to keep our businesses open. I simply don’t know what else I can do, and what’s even more horrible is that raising prices on a dying business will not help at this poing. I even cut the music provider saving $65.00/month and will go to the radio. I have done all the things I can do, short of laying off cooks which will be my next move. I just can’t see the advantage of moving to the back, and not being up front to take the phone orders. I always wanted to be there so that I could talk to my customers and make sure they were getting exactly what they wanted. I gotta’ tell you guys, when the boss has to do things which may hurt the business in order to save money, he is definitely in a bad spot; and the chances of surviving become that much less. It’s a short term save, but that’s it.
I just hope this recent downturn (last couple of weeks) is a result of taxes, not the gas and the housing issues.
Pete
This post is incredible. 1972! This Owner harbors great wealth with experience and understands the industry.
Pete, if you find the need to move to the back of the house, do so. Your customers will only appreciate you more, IMO for your effort.
PD
I think worldwide we are all seeing a downturn in spending due to a number of things out of our control.
Crude Oil has hit prices unheard of before and this impacting on petrol prices. Here in Australia we are seeing prices hover between $1.35 - $1.49 per litre ( U$6.45 - U$7.00 a gallon) and this is taking a big chunk out of discretionary spending.
Food costs have soared due to droughts and worldwide increase mainly to China, where a lot extra use of petrol has been as well.
Then there has ben a tightening in monetary policy from the US Sub Prime fiasco. This has had a major effect on our markets where many insitutions and companies became involbved in the whole messy affair. This has led to mortgage interest rates escalating.
All of the above has taken extra money from consumers pockets and they have been adjusting their spending accordingly and unfortunately take away food is one area they have cut back on.
It’s going to be difficult for a lot of operators to remain viable as sales slump, but others will remain stable as customers move around looking for the best bang for their bucks. The thing is that we dont go chasing our dollar downwards in desperation. I have seen a decline in our sales over the past 2 months but only last week had a small price increase and have had no detrimental effect. This little extra will pay for my recent rent increase and other increases of late. Also fine tuning staff rosters and other costs will lower of operating costs and improve margings. It’s funny how we can find costs savings if we are desperate enough, but don’t always do it when we are going along fine.
If you have to raise prices to cover costs then do so, despite where the market is. If you have to cut back on some areas as 1995flyingspur has done then that is smart business. The sad reality is that as the market toughens then some operators will unfortunately go belly up. I won’t be chasing sales into bankruptcy by cutting my prices or offering more incentives than what we do now. I will make cost saving adjustments where and when I can, but I will not devalue my offer and I will not devalue my quality or service.
If all else fails I will curl up in a corner and bash my head against the wall.
Dave
I agree with Dave, we’re just going to hang in there and try to figure out ways around this. It isn’t good sense to try to offerr huge deals when all the costs are rising. You’ll be working harder with no return.
It is tough to do everything you can do to make a great product, do all the advertising you can, and an outside source like gas or expenses will still make it difficult to make ends meet. It reminds me of working again for big corporations. The end result is still the same, you work hard and still don’t have anything to show for it.
This thread reminds me of this old famous business fable: http://www.successco.com/2008/02/here-is-a-marke.html
When times get tough, we need to keep doing what we’ve always done… make the best product we can and ADVERTISE. When things get a little slow, I often find myself thinking “I could save a lot of money if I worked an extra 20 hours at the store.” Of course that would only take time out of my day where I do marketing and advertising.
I think far too many people fall in the trap of trying to reduce expenses because things get slow. I don’t mean the types of expenses that 1995flyingspur is talking about; those are solid plans. But most people start looking to the big variable expenses: food and advertising. That becomes a suicide mission.
Maybe we are in a recession; I don’t know and neither does anybody else (at least not officially yet.) Recessions become self-fulfilling prophecies because of the types of actions in that business fable. The truth is that if it weren’t for media reports, the vast majority of the population would probably go about their daily lives and not even notice that GDP had small decreases for two consecutive quarters.
There have not been widespread job losses, we don’t have Argentina style inflation, interest rates are still low and the “housing crisis” has been very contained. Bear Stearns and Countrywide got wiped out and some people that were leveraged to the hilt lost their homes; those things don’t have widespread affect on the economy. Most importantly the stock market, which tends to predict massive recessions with remarkable accuracy, has stayed relatively stable. Outside of the financial sector, companies are still reporting strong earnings. Even GE’s bombshell earnings decline was completely attributable to their financial arm: their other businesses reported 10% to 15% earnings growth.
By all means, get those expenses reduced as much as possible in good times and bad. But you’ve got to keep your product great and you’ve got to keep advertising.
Pizza is still a very cheap meal, even at expensive shops like mine. We’re on the high-end of pricing, but a family of 4 could still easily have dinner for 25 bucks. I’d like to think that slowing times could LEAD people to our doors over higher priced full service dining. Heck, if a family of 4 goes to Applebee’s or Chili’s they’re looking at a $60 bill at least. I’m offering a lot more full meal combination offers right now because I think I can get those customers in. People may cut back a little bit and there’s no reason that “cutting back” can’t include getting pizza for dinner instead of a full service meal. Things aren’t nearly bad enough that families will start cooking all 7 dinners per week at home. During a depression maybe, but not because of 4% inflation and an extra 60 cents for a gallon of gas.
I guess my point is that things aren’t nearly as bad as we think. This could be a time of opportunity: Let your competitors be the ones to panic and pull in the oars.
Piper
It would be good if they had the gumption to say yes we are in a recession. Once you are in one then there is only one way and that is out of it, albeit however long it takes.
I guess while companies still anounce strong profits it puts a positive in the air. When we see them flinging out the windows of the high rise offices in Wall St then we should start sweating a bit.
Agree with you on pizzas still being a cheap meal and that people may start “dining down” from restaurants to pizzerias.
Talking about when the going gets tough, the old adage that the tough get going rings loud and true.
We just have to look at ways of doing it smarter and not being frightened into doing it harder.
I don’t want to lose my income but if it means for the short time it is slightly reduced then I can live with that, providing I can still meet all my expenses and pay my staff (and myself of curse).
The last thing is probably the most important - confidence. If you are showing a weakness in your confidence it will show to your staff, customers and product. It’s not easy to smile when your troubled but if you let it get to you and let it show then your staff will react negatively and will not respond to qualty product and service, customers will feel the tension and won’t want to be there and then it spirals down.
Dave
Piper - could not agree with you more…very well said. Now, if people would just tell the media where to stick it!
There’s an old saying, “Worker smarter, not harder”. I’ve found that if you find ways to reduce costs even when times are good, you’ll end up farther ahead when the times aren’t so good.
But, I also have to agree, we just need to keep our chins up high, be confident about our business and when the times get better again, which they will, we’ll be even stronger and ready for anything.
Jim, it looks like the store on north park is re opening under the fireside moniker, what made you decide to give it another shot there?
Steve,
The store on North Park is now called 4 Diamonds Pizza. I was going to reopen it, but I couldn’t find adequate help to trust. This store here in Rockford is exactly what we were looking for, plus the economy is stronger up here and this is where we live. People bounce back quickly here when the gas goes up, and we’re already doing better sales then the place before us. Plus, our customer base is growing daily with alot of compliments. We actually had a few of our customers ask us to move to Rockford, and it seems to be working good for us.
We’re looking forward to the hiway construction starting back up, on top of the lunch business we have, this will make it even stronger.
Very nice, I have been meaning to swing in but i am always in the area between your lunch and dinner hours.
Now is the tome for the bold and assertive to make their move.
Yesterday was Tax Day in United States. We dropped our most recent direct postcard in the mail that day. I figure it is the prime time to remind people that we are out there. The time to score large dividends is when the market is soft and others are cowering in the corner. The message is that we are still there, we are not hiding, and we are going to do whatever we can to get their business. Sure, we gotta pay our taxes as well, and gas prices are up . . . we are still selling that same great pizza. Come on in and get a smaller pizza if you can’t afford the large.
Excellent post, Piper. I’ll just add that I know a man in the restaurant business (not pizza) who told me a few years ago that his only real secret was that he “sometimes made $10 an hour (working the kitchen) and sometimes made $200 an hour (out marketing).” His secret was that he never allowed himself to forget where he was most valuable.
Cut costs, if you must, but trim only the fat - don’t touch the meat. Also, do not compromise on two things: The quality of your product and your marketing. If you have to cut marketing dollars, you need to replace them by getting out and beating the streets yourself.
I also really like the idea of going after the Chilis & Appleby’s crowd with some full meal specials - will shamelessly steal that one and call it my own 
Hey guys I wanted to mention something I did years ago which has well paid off. If you want the hotels, you need to offer 50% discounts to all the employees who work the front desks. I promise you, within no time you’ll have them locked in, and your competition will never see another hotel again. In one case, the employee offered to put our menus in all of the rooms.
Also, something which I considered pretty aggressive was my bar program. Mind you, your name absolutely must be on your pizza boxes, or this won’t work nearly as well. Talk to the bosses at all the bars in your area and offer 40% off to all their patrons. I actually had one bar put table tents out saying “Darios and Smity’s bar are teaming up, order from them and get 40% off”
The bars will never see any of my competitors walk through their doors again!
You see, you are getting sales which you ordinarily would not have gotton, and as a result, you simply take the cost of the order and take the rest as profit. This is prifit you didn’t have in the first place, so the added food cost is moot. It acts as a snowball, and after some time you will see the same bar (on a busy night), order several times. The drivers love it, and so do I. Just knowing my competitors aren’t making the sale tickles me pink. Just make sure you get their cell phone number.
I know many of you wouldn’t like to do this, but you need to think about how it impacts your competitors. This acts as a loyalty getter in the long run, and you will have customers ordering your pizza when they aren’t at the bar who would’ve ordered from their usual place had you never served them in the first place. Also understand that when a drunk guy orders a big pizza, he will most definitely share with strangers, literally acting as one of your best friends just trying to help you out. He’s proud he got your pizza, and he wants to tell all. Don’t forget, he’s drunk and happy and man does that pizza taste good!
Those are just a couple of things you can do which will bring immediate results, which don’t cost a dime.
Pete
Darios