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Pricing structure ????

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wiseguy

New member
Currently I offer small 12" and large 16" pizzas. My pricing is 7.99 for small cheese and 1.00 per topping, and 9.99 for large cheese and 1.50 per topping. I also have a line of specialty pizzas that I sell for 12.99 small and 15.99 large. How would this compare to others pricing structures? I am located in a more rural area with a fair share of competition. One competitor is supposedly selling a large anyway you want it for 15.88 and a freed medium any way you want it. I have not verified, but find it hard to believe. A large and a medium anyway you want it for 16.00??? I don’t want to make a fortune…just a living. I would not turn down a small fortune 😉 but my main goal is sustainability. What do you guys think?
 
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Our prices are;

12" - $10 +$1.00
14" - $12 +$1.30
16" - $14 +$1.60
14" Deep $14 +1.60

Multiple price toppings:
Art Hearts, Sun Dried Toms, Mesquite Chik, Cashews at 2X topping price
Elk, Boar, Pheasant, Rattlesnake, Alligator at 3X topping price

Pesto Sauce and White Sauce count as toppings. BBQ and Buffalo sauce do not.

We have about two dozen named combos. They all have at least 4 toppings. Counting topping with multiple pricing, they range up to 9 toppinigs. Pricing on them saves a dollar or two but mainly they are there to suggest product more than to be a special deal. Customers are lazy. Give them a catchy name, and an appealing description and they order a named menu combo with 6 toppings instead of “sausage and pepperoni”. You do not have to give them a huge discount to do it, you just need to make them salivate at the thought of the combination.
 
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That is comparable to my pricing, but obviously pricing structures are going to vary depending on food costs, level of sales, etc. etc. The way I try and tackle menu pricing initially is to break down each menu item to find out what it costs me to make, then factor in all the fixed and variable costs of my store prior to break even and price the menu accordingly. I wouldn’t worry a whole lot about your competitor’s pricing levels – ultimately just price at what you can afford to and makes sense for the quality of product you’re delivering.
 
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I would look at your actual food costs as well.

Your pricing is similiar to ours. We get 10.99 for a 16" cheese. Our specialty pizzas are 13.99-16.99. What I am finding out for myself lately is I don’t need to feel guilty about charging for my food. Seems easy enough but when a family of 4 comes in and the ticket is 40 bucks plus…oddly I feel bad. I am changing the way I feel. I am charging for my food and promising to continue giving great food at the most reasonable price possible.

I owe it to my customers to make a living…without making a living I can’t make them food.

We are currently looking at our coupons, raising them and discontinuing most. If I charged 16.99 for EACH specialty pizza I would make a good living but instead I give them a special on an already specially priced pizza.

Look at your coupons…I am sure you do the same.

Can you honestly say you would charge a customer… for a large one topping and a large specialty 28.48 I highly doubt it. And why is that? That is the question I am answering myself. We would tend to find a special to fit this customer and offer them that.

Could you imagine going to wal mart and checking out and the cashier saying ohhhh did you know you can get a product for cheaper. No they let you buy what you want and you pay accordingly.

Most here will say increase your prices…I say before you do that…start charging your menu prices.

Kris
 
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Our menu combo specialty pies in 16" start at about $20 and go to nearly $30. Our three best sellers are all in the low 20’s and come to $25 or more with sales tax and delivery charge.
 
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Kris:
Can you honestly say you would charge a customer… for a large one topping and a large specialty 28.48 I highly doubt it. And why is that? That is the question I am answering myself. We would tend to find a special to fit this customer and offer them that.
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Large 1-Topping and large specialty pizza (14 inch) at our place would be $32.48 and I don’t feel guilty about it at all. That’s enough pizza for at least 6 people, possibly 7. I think $5.41 per person is a great deal for a gourmet pizza. It sounds expensive when you compare it to some garbage $5.00 pizza, but it’s still a pretty good value when you view it against other dining options.

Wiseguy, price where your pizza is worth and what the market will bear. Don’t worry about what your competition is doing. I have a competitor 2 blocks from me that is about 30% less expensive across the board. On weekends my dining room (60 people) is packed and there’s a line waiting for tables. There’s nobody ever in that competition’s place, and I mean NOBODY. I don’t even know how he’s staying in business. If pricing was a big concern it would be reversed. I’m not naive enough to think my product is THAT superior to his, but we have a very good product and very good service. But most importantly, we’re marketing machines.

For us in the business the pricing issue is always in the front of our minds. We compare and worry that we’re higher or lower than the competition. Consumers aren’t focused on it at all. They’re not calling 6 places for quotes and ordering from the cheapest one. They pick up the phone and order from THEIR pizzeria. The goal is to become that place. Think about how you make your own buying decisions (personal, not business).

BTW, bodegahwy made a great point about combo pricing. There is absolutely no reason to deeply discount combo pizzas. They are there for the exact reason that he stated. A lot of pizzerias shoot themselves in the foot by offering 20% discounts on combos.
 
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Take one quarter of sales (3 months), divide your cost of food by your food sales. Your percentage should be around 26%. It is understood that this may be a little high, however with the current cost issues, we can’t always cover them by increasing our prices by 126%, in order to stay within with national industry average. In fact, I do believe there may be a slight change here, and the food cost percentage may be higher as a result. It’s really a tough situation we have going on, with flour, cheese, and literally everything else going up as a result of diesel costs. The days of adding 126% or so to the increased cost are over, or at least coming to an end, and we MUST begin looking for other fat (not meat) to cut in order to offest these costs. Whatever you guys do, do not change your product to help you problems please! That is meat, and we don’t mess with that. Small example, always purchased windex brand in the past, no am getting glow, and saving $120.00/month. If you do enough of these things, you will get there, and trust me when I say, there are many fatty items you can cut! You just need to look at you menu, and communicate with your supplier. He will definitely go out of his way to help you out.

Pete
Darios
www.dariospizza.net
 
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