Chicken or the Egg Issue - Menu Pricing

Hey ya’ll. I need to price out my pizzas for the business plan but it’s been extremely hard getting any suppliers to call me back since I’m not a legitimate business yet. I was wondering if any of you were ever in this situation and how you got through it, or if you have any ideas, resources, etc.

Always a moving target.

Pricing is more market driven than cost driven. If you have superior product and service you can charge more… but only so much. If you are in a market where the nationals have been at war and the prices are stupid don’t get tempted to compete with them. You can not touch their costs and pricing to match them will sink you.

  1. I suggest that you go collect menus from every competitor in your area. By competitor I mean businesses which are the same business model that you will be. i.e. if you will be delivery get menus from Delcos, if sit down get menus from them. If you are an Indy shop, focus on the other Indy shops.

  2. Give some thought to where you think you will fall on the quality/service level in comparison and price accordingly.

You can get info from others here in the TT on pricing in your region for Cheese, Flour, meats etc. Those are what is going to drive your costs. Don’t worry about the price of onions, yeast etc etc.

Its exactly what Bodega said.
If youre really struggling with how much you as the owner can expect to pay for your main items (cheese flour meats etc) get a membership at restaurant depot. Use the online portal and check prices that way keep in mind your vendor is going to be a bit higher on those items but it will get you in the pricing ballpark.
Definitly dont use your local supermarket as a guide pricing there is way off example: chicken tenders $1.35 this week for me
Local supermarket $4.69

Another thing to keep in mind is that the cost of the inventory items you buy will change weekly while your prices will only change every six months or year or so. A couple of times I have gone two years between price changes but for the most part I try to adjust prices just once per year. There have been a couple of times that I have bumped prices twice in a year… but that is in a 19 year history. Others have a different approach and prefer smaller bumps. I tend to wait until it’s time to raise my price by $1.00 and then do it.

Because of the different price cycle (weekly for your inventory, annually for your menu) you just can’t drill down as close as you might want to on building your prices up from cost. Let the market drive your menu prices and then figure out how to deal with it on the cost side. The good news? The competition pretty much has to exist in the same reality.

My experience has been that portion control is a bigger variable than inventory prices.

I was in the same boat but, as stated above, you triangulate comps, market positioning and your business model and get pretty close.