Dropping Delivery? Adding Deck Ovens? Raising Prices?

Pizza Shop Talk The Think Tank
1

Has anyone who used to do about 25-35% of their business in delivery, ever stopped delivery? As I look at gas prices continuing to climb and the labor pool for drivers getting smaller and smaller, we’ve considered dropping delivery at our place. Right now it is profitable. But, in my heart I’d much rather only have to manage carry-outs and dine-in orders so that I can give the best service to my customers. The delivery business is never consistent. Sometimes we run 25 minutes for delivery sometimes 55, just depending on how hard the rush hits.

We’ve also talked about getting rid of our conveyor oven and getting a deck oven. I realize that may not be a popular idea among the Think Tankers, but I wasn’t surprised when I saw something about that splashed on the front page of Pizza Market Place. We’ve been talking about it a while. I’ve read that I can get a great bake out of my conveyors, but it just seems that the places here in town that do the most business are old school decks.

We’ve recently raised prices. Significantly. But, I swear I don’t know if it will be enough. Flour was delivered to me last week at $37.11 for a 50# bag. This is on top of the cheese run up from last year… the meats creeping up etc. Most of my specialty pizzas are now priced at $18.99 for a 14"

What is everyone else doing right now to weather this storm? I don’t anticipate prices of any of my ingredients coming down anytime (or ever) soon. I’m just hoping that consumers soon have the cash flow to start spending money out on a regular basis again.

2

I think you are nuts to consider giving up a third of your sales while other issues are running the tide against you. Your rent, utilities and other “fixed” costs will not decline and some of your variable costs will not fall in direct proportion to the lost sales all of which means that you are likely to give up quite a bit more than 1/3 of your net when you give up 1/3 of your gross.

I also would not be so quick to assume that the type of oven has ANTHING to do with the established competitors success.

Depending on how many toppings your specialty pies have, it looks to me like you should be alright with the prices you have. I assume you have a delivery charge? Our pricing is pretty similar to yours (US $$ right?) and we charge a $2 delivery charge.

Keep up the marketing pressure focusing on quality and service rather than on “deals”. Go out and make local connections like joining your local Rotary club or Lions or whatever. Run a report on your POS to identify customers that ordered from you more than once in the last 60 days and call them each personally to thank them. Visit the front desks of any hotels and motels in your area and introduce your self and give the front desk staff certificates for FREE pizzas and offer a great discount after that.

3

Scott,

I think the key for you is to keep doing what you are doing. Don’t panic. Don’t go making all kinds of changes FOR YOUR CUSTOMERS.

Change things on the inside of the store. Look around for quarters not dollars. You are going to find them all over the place. Food and labor is our top two controllable costs. So ya can’t control food so much right now…control labor. Train your crew to multi task. Use cooks to drive. Use drivers to cook. Start bringing people in staggered. 4, 5 and even 6 rather than all in at 4. Send everyone except one closer for each position home after the rush. I am amazed, I used to keep 2-3 cooks until close then bumped it to 2 and then to one. All the stuff still gets done cuz the closer wants to leave. They just work faster.

Friday and Saturday nights are great nights to do this…assign a few tasks “before” they leave and you won’t believe how fast they can get stuff done. Do prep all day instead of just in the morning. When there is a slow moment prep something.

I know you think delivery might be costing you tons but utilize those people in other areas. You are not going to save 30% by getting rid of it. You are probably gonna lose double that.

I am a deck oven fan. Truly. BUT I wouldn’t encourage you to change your oven, right now. Your baking times will get worse. The degree of difficulty training everyone will cost more money. You should be on auto pilot somewhat and so should your crew so you can spend time on things that normally aren’t a big deal or that you haven’t worried about. Weighing is not an option anymore. Phone Bills, water, electric, waste, mistakes, employee food and drink, uniforms, cleaning supplies anything and everything which hasn’t changed…find some $$$$ change $$$$. Spend time going over your schedule save a few hours here and there.

My phone bill alone I saved 40 bucks just by making a few calls…I save who knows how much not allowing my phones to be used for personal reasons, or even using their own phones while at work. Instead we prep door hang, or box top. Check around on insurance. Bank Charges. Coupons. Flyers. Each thing individually wouldn’t save you much but combined they will help.

Keep doing what you are doing.
Hang in there we are in for a long ride!

Kris

4

I think the advice from the guys before was great. I just wanted to chime in on the oven part. I do prefer a deck pizza, but at some point you must consider the training to get everyone on the same page. We are in the process of switching to a conveyor.

5

Kris is right on the savings.

Places I have found money in the past:

Got rid of my fax line. Now fax on one of the other lines when we need to. Savings $600 per year

Shopped bank relationships by bringing our statements around to all the banks and asking what the charges would be. Savings: $800 per year.

Comparison shop our food vendors rather than sole-source. Savings: hard to pin down, but I guess about 1% of sales.

Negotiate ad rates. Savings: about 5K per year (on 30K ad budget)

Shopped our business insurance (work comp, gen liability, auto). Savings: $500

Pay insurance bills quarterly rather than monthly. Saved $50 per year.

Prepaid Yellow pages ad saved 8% over making monthly payments. Savings $320 per year.

Print two years of box toppers at a time instead of one year. Saved $1000.

Run one oven instead of two during most times. Savings: about $200 per year.

Installed programable thermostat with multi time cycles, locked cover. Savings: About $1500 per year.

Ditto on the staggered shifts. Savings: At least $5000 per year.

Started buying loaf cheese rather than shredded. Savings: about 10 cents a pound. (We use maybe 40,000 pounds a year)

Attend food shows and negotiate for pricing on key items like sausage, pepperoni, cheese, boxes, tomato products. Savings: about $2000 per year.

Regular scheduled maintanance of equipment. Savings: about $500-$1000 per year (10 year old shop)

Carefully check all bills for mistakes. Savings: about $1000 per year.

Track and eliminate employee early clocking in. Savings: hard to say, maybe $2000 per year.

Switched to wage plus bonus over giving raises. Elimiates Overtime premium on the increase and allows me to deduct cash shortages. Savings probably several thousand dollars. Probably $3000?

Stopped paying my accountant to do payroll and quarterly reports and switched to ADP. Savings, about $500.

All in all, compared to how I ran things when I opened 9 years ago, my net on current volume is better by at least 30K and maybe by 35K than it would have been.

6

Sittin back after close eaten your best pizza after a busy night…priceless.

I just couldn’t resist. Thanks for all the suggestions we should keep adding them…

Kris

7

scott there is one other thing I noticed we are in sort of the same demo!
I feel when gas goes up so does the demand of delivery
as for the oven
LETS BE REAL HONEST, you me and all the owners can tell a slight difference in the old school deck ovens, but the average consumer do you REALLY feel they can?
I think you would be giving up effeciency speed and increasing wages for a more skilled worker.
myself I going to use this time to squeeze my competiters marketing the right way and not heavy discounting!

8

I think he was referring switching to Deck Ovens because our current conveyor setup is costing us quite a bit in repairs. The middleby marshalls are constantly breaking down on us and causing problems. Most of the time we HAVE to run one oven anyway because the other is broke. So that helps cut the cost of gas :)…

I was thinking the deck ovens would be less prone to failure, since there are really no moving parts… and they are alot cheaper to buy then the conveyors. We are not a huge volume store either, so I don’t think we would have too many problems.

  • Rob
9

IMO, deck ovens produce a product a conveyor can’t touch. So many shops lose business because they change. In this instance, it is an upgrade and an investment to deck ovens. Perhaps. when it comes to delivery, restrict the area within (for example) three miles. A busy deck shop with tossers, turners, cutters, drivers and such is a tough business but it is fun and so worth it at the end of the day.

PD