Just 4 weeks ago we had a price increase from $96 per $20kg block to $106.65 per 20kg block, an 11% increase.
Today I got a letter from my supplier that the price is going up again next week to $134.75 per 20kg block, a whopping increase of $28.10 per 20kg block @ 26.34%.
We got a copy of a letter from the largest manufacturer in Australia and New Zealand to our supplier outlining the increase stating pressures of limited production, the world commodity pricing and the continued drought in Australia and a dry spell in New Zealand. They said that there would be ANOTHER price increase on 18th of October 2007. This will make 3 price increases in 2 months.
I have just put my new menu to print so any fat we had to see us over until the next menu has been absorbed in total. As we had a 9% average increase over the menu there is no way I can increase again.
My supplier has then added to this to say that flour is going up by about 25% in November.
Our only option is to reduce the amount of cheese per topping and make smaller bases to recover some of the costs, or add a price surcharge on top of our new price list.
Funny thing (not really) is that only 10% of the wheat grown in Australia is used on the local market and the rest exported and ony 50% of Dairy procduce. We have to pay the world price point.
Oh the joys of being a pizza operator
Dave