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Would a $4.99 Large Pizza Deal be so bad?

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pizzasam

New member
I know it goes against alll advice on this forum but here me out.

I have one comptetior in a 28K town, neither of us get enough business, so there is only room for one. We currently operating at 75% gross profit. I have heard that the other pizza place has been closing early even on a Saturday and last Friday he had three staff outside our shop with boards saying Large $7.99t/o or $9.99 delivery for his shop.

This has wound me up and feel a temporary price war would be a good thing for us and warning to him. I was thinking Large $4.99t/o or $7.99 delivery during January when we are quiet anyway. We need more people to try our pizzas and it would starve him of some customers as well. Our rent is a third that he is paying, we have no franchise fees to pay and our staffing and operating costs are a lot lower.

Would we lose all greadablity for a ‘Mega Month Deal’ like this?
 
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I can’t imagine there isn’t room for two pizza places in a town of 28,000. I am in a town of about 7k and we have me, PH, local Italian restaurant, and pizza brew pub. I wouldn’t do it, I would try to get more of those 28,000 people to order. Have you done any direct mail? If not, I would hit each mailing route a menu with coupons or deals on a high quality paper and full color one route a week until you hit every address in your area. Also, every order that leaves the store has a box topper on it with a bounce-back deal. This deal doesn’t have to be something you lose alot on maybe some combo deals. Are you on Facebook? If so, you can do things to bring attention to your store like contests, rewarding local businesses, talking about local sports and other things that keep your name out in the community.

Selling a pizza for $4.99 in a town without alot of competition seems to be a last ditch effort to stay open and you would get alot of one time customers who only order because of the price.
 
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28,000 people and only 2 pizza places sounds like the “promised land”…

I do not think you have a price problem…I think you need more aggressive marketing?..

How does your premises look from the road?..Do you have enough signage and does it look “great”?..I was out of town over the weekend and saw lots of pizza places that looked like “crap” from the outside…Spruce up your “curb appeal” and it will go a long way…

Are your delivery vehicles “wrapped”?..In my mind, next to on premise signage, wraps give you the best return on your marketing investment…

How often do you get menus to each house in your target area?..I think 7 or 8 times a year is required…I am not a fan of “aggressive” offers so I would just start with some packages that increase the tickets…and maybe include magnets…

Do you reward loyalty…Track your clients on your POS and every so often give them something free for their loyalty…I am not a fan of giving food that you can sell away, so a t-shirt, apron, tote bag, etc. will work…

Do you sell gift cards?..If so, put together a package with so much on the card and a free gift…Again a t-shirt, apron, tote bag, etc. works…With a 25.00 card and and 3.00 or 4.00 gift you will almost break even with the unredeemed cards…But I talked with a pizza place on the weekend that calls all those with unredeemed cards and offers an extra incentive to use card…After all, you want those “new” clients in your POS…From what I understand, you can add some sort of “activate” function on your website to make card valid so you can capture names…

Do you send seasonal greeting cards…I love what Paul does…See another thread that is active right now…http://www.pmq.com/tt/viewtopic.php?f=6&t=10866

Good luck…
 
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Terrible idea. Don’t sell yourself short.

There are many many things you can do to increase your sales. Lets look at your market:
  1. 3% of your customers will only order from you. (You have a POS right?)
  2. The rest either are once in a blue moon (kids were in town), price sensitive (we had a coupon), or just plain swayed by marketing (got a flier or saw an ad somewhere).
Are you maximizing your front office customers (new orders/customers)? Are you maximizing back office customers (Database marketing to get those lazy or price sensitive families back)?

If not, then get the idea of a money losing proposition out of your head, it is a race toward the bottom. It can only do more damage than good.
 
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I agree with the comments of only having two pizza joints in town. 28k people and only one other…you should be doing very well. Does the town hate pizza or have a religious problem against flat food? Something is off here. I think going with a $5 pizza will put you under also. The idea here is too make money not just serve cheap food to the public as a community service. You also run the risk of now having 28k people that expect a $5 pizza all the time. Not too mention…even with low rent and overhead… you have now provided yourself with a sub-minimum wage job that even if it takes off with success at selling the $5 pizzas…how do you pay for the labor to handle the rush? Rethink your marketing and figure out why the 28k are not coming in right now. :?:
 
Wow! I always learn from this site, but the responses to your question have impressed me. These people are insightful and wise. And qfcmikes remark about “flat food” not only got a huge laugh outa me, it also has to qualify as orriginal quote material. I’m sure that all 28K people in your town noticed that your competitors message was conveyed right in front of YOUR place, and they remember class when deciding where to place an order. Offer a great product and they will come.
 
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If you offer a $4.99 pizza for a month, the next month when your customers order a pizza and are paying $10.00, they are going to feel like they are being ripped off. It will devalue your pizza. When people think of $4.99 pizza, they don’t think quality.

On a side note, I would love to be one of two pizza shops in a town of 28,000! One of my shops is in a city of 12,000 with 8 other competitors.
 
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Is there some reason he is entitled to put employees right in front of your store? Is he located across the street or something?

Tell his employees they are trespassing and run their A$$es out of there.

Instead of dropping your price for a month, take half the effective total discount and spend it on marketing to reach new customers… it will be cheaper and will work better too.
 
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Hitting the $5 price point has its merits, as I return to the marketplace in our new venture…but we’re a college town & reconsidering doing a $5 pizza, but a 12" one…must be ordered on-line, for pick-up only…
 
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Thanks for the response guys, I have been torn with this because I really need increase our customer base. The idea of doing 10 pizzas for $50 does not appeal but getting the food in the mouths has gotta help.

Our shop does look smart and clean with an open kitchen, on a main road with little foot traffic but lots of cars. Menus look professional on full color 17" x 12" paper (7500 distributed bi monthly plus 500 to selected areas per week), online ordering and active facebook fan page, menus in local sub shop, sports center and small army training ground. Banner a football ground. Return custom is very good, although new regulars seem to replace customers who have dropped for some reason(trying to figure this out). Nothing but compliments on the pizzas, price and website/facebook page.

Weekly takings average $500 - $700, yes that’s right, $2500 per month. 28K, 7.5K homes and only one competitor. How can it look so good and yet be so bad?

As for our competitor standing outside our shop, not sure there is any law against it, he’s the other side of town. We didn’t see any loss in business and he got a whole load of criticism by the public. Don’t think he will be around long as he needs to hit $15000 a week.

Can a town really have a population that hates pizza?
 
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Something is not right here. You are getting only 2/1000th of the town into your store a week with sales like that. Now at $5 pizzas, the other guy would need to sell 6 pizzas a year to every man, woman, and child…and maybe dog in that town to hit $15000 a week. Not too sounds mean but you are doing in sales a week what you should be doing in an hour on Saturday night. On a personal note…did you upset the entire town somehow? I know this can happen because I have witnessed it firsthand. In a small rural town of 3500 where the pizza owner was more than friendly with his HS age manager and then the town found out. It took about 3 months of no sales and a visit from the girls extended family with a baseball bat or two to make him rethink his location. What is missing here? :?:
 
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pizzasam:
. Menus look professional on full color 17" x 12" paper (7500 distributed bi monthly plus 500 to selected areas per week) … Return custom is very good, although new regulars seem to replace customers who have dropped for some reason(trying to figure this out). Nothing but compliments on the pizzas, price and website/facebook page.
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Yep. The numbers do not match up. How are you distributing the fliers and what kind of database marketing are you doing?
 
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If you don’t mind - it may clear things up for all of us if you share your website?
 
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314…I am starting to think he is based in South Park, CO. Everyone knows that only the CityWok survives there! 😛
 
I would suggest taking a good look at how you want your customers to view your establishment and how you’d like to position yourself in their minds. In the eyes of the consumer, more often than not, a first impression is a lasting one. Are you viewed as the local, hometown pizza shop that makes dough, sauce, etc in house? If so, I think that pricing your pizza at $4.99 will very quickly place your shop, in the minds of customers/potential customers, in the chain, franchise, junk pizza category.

In my opinion, it would be very difficult to price your pizza at that price and a.) still have people view it as a quality product and b.) retain that image of you as a hometown, local joint. There are also people that will likely not even give your pizza a try because they equate cost=value and being at such a low price point will turn them off. I wholehearteldy agree with other posters in that your money would be better spent doing another form of advertising. Do you really want to be known as the guy that follows suit of what the “other guys” in town do? Doing some creative marketing would better serve you!
 
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@qcfmike - The other guy certainly isn’t hitting what he needs, we looked at the same franchise in the same property and thought ‘NO WAY’. I certainly haven’t done anything to upset the town and I believe we have a good reputation from those that have tried us, we did get the staff to ask around their friends if they new of any bad vibes but nothing.

And I agree the figures don’t marry what should be happening, and I agree that price is not a real issue as we are not talking big spending decisions.

I didn’t intend this thread to pleat out my woes, apprieciate the feedback. If I may I will post some pics of our store and marketing material for the experts to critic.

Our website is www.frescopizza.co.uk (To get in to the website you need to enter a postcode, this is a new feature as we are trying to track flyers to visit ratio) type in TN6 2SH to see the online ordering process. Facebook page is at www.facebook.com/frescocrowborough.
 
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OK, that clears up many questions I had.

₤4.99 is US$7.80 and changes the equations and rules-of-thumb many Americans may have been applying to your circumstances. Plus, the ratio of die-hard pizza customers is lower than in the US.

But, much of the advice so far and in the future may apply. Marketing and the marketing culture is different, so be careful to use your own judgement, pizzasam! For example, door hangers would be the kiss of death in many countries outside the US. Customers may run to your place and burn it down in some cultures.

Maybe you should deliver pizza and bangers or pizza and curry! :lol:

The fine folks here have a great wealth of knowledge and I’m sure you’ll get many helpful ideas.

I’m off to check out your site now…
 
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