Should I Keep it?

[HannahBananasOnline]

Hey All,
As many of you may already know I’m a restaurant that serves pizza, not a pizza joint. I’ve always stuck to my guns as far as ingredients go, I never compromised to compete price wise. This month I’m raising money for our local cancer society drive called Relay for Life. I’m selling my 16" pies for 6.99 all month and donating the profits to the cause, my regular price is 10.95. My pizza sales are usually 10-13% of my sales so far this month they are 20-21% and I’m killing my competition who only sells pizza. This is my decision. I can easily continue this price all Summer and literally destroy the pizza place down the road and probably hurt a couple more in town. I use Grande and Vilante so I using premium products and would be raising my food cost on my pizza sales to 50% on a plain pie and up selling from there. I’m assuming I will continue at a 20% total sales throughout the Summer and expose the entire community to my awesome menu and restaurant. So… do I keep the price, raise it to 7.99 or just go back to my 10.95? I always value everyones opinion and would love just shots from the hip on this one. Thanks everyone, back to making pizzas!

 

[pizzapirate]

Imo, if your niche is “premium” the low prices are hurting your image. I would never frequent a place with such low prices. If I was already a customer I would become very suspicious of the lower prices. People can convince themselves that you went cheap with ingredients even if you didn’t. Perception is everything.

If you are doing a big promotion for charity I don’t see the point of discounting your pies – especially so drastically. With such a worthy cause I would think you could sell a lot of pies at the regular price based just on that.

If you did it all summer I think you would get people used to the idea and they would resent it when you went back up. I imagine the thinking would be:

“Hmmmm, the pies are exactly the same, why did they raise the prices???”

This thinking would be especially true of the new people you just attracted to your restaurant.

Just my thoughts . . .

Btw, I think you are doing a great job with your emails. When I get the time I hope to get something similar going.

 

[Rick_G]

I tend to agree with PizzaPirate. Please don’t take offense, but if you are donating profits to charity, and you lower your price on the item, then donate a sum of money to the charity, it becomes blatently obvious to the customer that you are profitable at the lower price, even if you really are not. Perception is reality to most people, and once an image is percieved it is hard to change. The horse is out of the barn on this, but I would have thought it would be extremely generous to donate a pecentage of every regular price 16" pie.

As far as keeping the price, I would restore to normal pricing after the fundraiser. If questioned about it, you can tell them that you did this promotion for charity and absorbed costs other than food cost. If you want to do something over the summer to pressure your competitor you can do some kind of " summer stimulus package" but not discounted so deeply as it will give the perception that you are the same quality as the others.

About 5 years ago I came to the realization that I never want to discount something to a price so low that I am not happy selling it at that price everyday. When I think I need something better, I give something free like breadstix, 12 " one topping or something like that with an order of XX at regular price rather than pricing items at a level I can not happily maintain.

Rick