Gas prices create opportunity for pizza industry

Sept. 12, 2005

High gas prices are a good thing for the pizza business.

Before you brand me totally insane, hear me out. The high gas prices that are sending your delivery drivers screaming to you for better reimbursements and costing more to have food shipped to your store can benefit the pizza industry — if its players make the best of it. Here's how:

Encourage carryout instead of delivery

Since 1993, Australian pizza operators have waged the industry's bloodiest-ever price war. One way operators have remained profitable amid the battle is to charge extra for delivery and promote the fact that carryout costs less. The result is that an industry once dominated by delivery is now dominated by carryout.

The Eagle Boys Pizza chain has dealt with the shift to carryout by revolutionizing its carryout experience. The 160-unit company has a 2-minute guarantee or it's free time limit on carryout transactions ordered from a limited menu. Plus, it is adding drive-thru windows to compete with quick-service specialists like McDonald's and KFC.

Carside and/or curbside services offered by casual dining chains have been a tremendous success. Carryout customers phone in their orders, park in specially designated spots near the front door, and wait until the food is brought out. What keeps pizza operations from doing the same?

If carryout customers have to come inside your store, do something to make them comfortable while they wait. Have a self-serve soda fountain with small, disposable cups. Toss gumballs or trinkets to kids who come in with their parents. And always have product samples for waiting customers to taste.

Lastly, consider giveaways of inexpensive food. Not only does getting something for free leave an indelible impression on customers' minds, the appearance of a spontaneous gesture that says, "Hey, you might enjoy this," makes customers like you and your operation, not just your products.

Charge a permanent flat rate for delivery

The combination of rising costs for operator insurance and food all but mandate this; add in the need to reimburse drivers more for their gas and it's a necessity.

Just to see what my coworkers thought about being charged for delivery, I conducted an unscientific e-mail poll. Three-fourths of the staff said a delivery charge would not reduce their pizza consumption, and three-fifths said they'd still get delivery despite a charge.

Twenty-four percent said they'd buy less pizza if charged for delivery, but I bet the bulk of them would eventually become carryout customers. It's exactly what happened at Domino's Pizza and Eagle Boys in Australia. People didn't eat less pizza, they simply changed how they purchased it.

Since everyone hates high gas prices, position your delivery operation as gas-saving for your customers with taglines such as "Gas is expensive, so use ours" or "Gas gauge on 'E'? Our tanks are full."

Look like a hero by promising in your print materials and advertisements that you give 100 percent of your delivery charges to your drivers. It's the right thing to do anyway.

Topics: Commentary , Marketing

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