I Put My Prices Up

Just finished our first week after putting up our prices and to my surprise hardly a mention of the increases and no reduction in sales.

To give you an idea of the cost increases we have absorbed in the 22 months I have been in the shop, I have list some increases.

Mozz +57.5%, Cheddar +63.2%, Flour +37.3% (going up again next week by about 25%), Chicken +44.3%, Ham +36%, Bacon +21%, Prawns +18.5%, Pineapple + 27.9%, Olives +34.9%, Oil +43.5%, Pizza Boxes + 22.1%, Ribs +26.2% plus numerous other items over 10%.

Add to this insurance +58.5%, works compensation insurance +100% and power / gas +23.2%.

We increased our menu about 10% average with some lines going up 7% and others 20%.

It was only due to tight money controls and massive reductions in staff costs and better planning and implementation, and stricter portion controls and reduction in topping weights, that we have made headway, plus growing our sales by 27% year to date.

When I took over the shop I decided to hold prices at the previous owners level so as not to antagonise customers, but given the same scenario I would raise prices as I needed and not wait this long. Admittedly most of the increases have come in the past 3 - 6 months due to the drought effects right across Australia.

On our current $11k per week turnover we can expect to gain around $900 per week extra profit which puts us right in the profit slot we should be in :slight_smile:

To those who have been reluctant to raise prices I implore you not to sit on the frnce like I did. You are there to make a profit and get a reasonable return on your investment and not just to keep your customers happy by giving them a cheap price. We dictate our prices and profits but always seem to bend to the belief that we should give customers everything at our own expense.

I feel comfortable now with our decision to raise the prices and will now do so every 12 months as prices rise.

Oh, and by the way we are at the top end of the price market with our average 13" pizza going from $14 to $15 and our gourmets going from $16.50 as high as $21 (average $18), so we were very cautious of moving.


Do you still do a second pizza deal? I am thinking it is time to just do straight pricing and set it at the 25% food cost level and then when it gets to 30% do another increase.

We still do the two large pizza deal but have removed the 1/2 price drink or garlic bread. We increased the deal from $23.90 to $25.50 and give them the garlic bread for $2 instead of the normal $3.30. This way we pick up a bit more and they pay full tote odds for the drink.

I will send you our new menu. It is a lot more easy to read than the previous one I sent and we have simplified the prices, deals and additional charges.

Overall it has been well received by customers, but for the foreseeable future I can’t see us getting away completely from the 2 for a price deal.

I’ve got our cost down to around 26% average on our pizzas but some are down as low as 22% and some up to 30%, but overall around 25%.

I will do like you and re-adjust the price when costs hit 30% again. I think this is a good benchmark to work at.