I have gotten quite a few e-mails , recently , about the rising cost of energy , and it's impact on the independent pizza shop operator. Most of them are having the same issues that have been cropping up in the consumer sector for the past year or two. Not only is the cost of electricity going up , but now the pinch is on the delivery drivers , as well as the suppliers of all the ingredients we need as the lifeblood of our shops. The crunch is coming at you from all directions and seems to only grow , both in severity and size , every month. There are ways to slow the snow ball effect down , and even reverse this barrage , before the situation gets out of control.
The first thing to know is that panic is a very unnecessary and destructive reaction. While you are confronted with the reality of the bills , your employees and customers are more aware of the little things that daily operations involve. You may want to save money right away by changing suppliers and start using a little lesser quality of cheese or maybe start closing an hour or two earlier than normal. Don't do it. The minuscule amount of savings will never make up for the loss in profit you'll see by throwing the customers a curve ball , when they depend on you for consistent product. The word will not only spread all over town , but your employees also are residents in the same community , and therefore , you will also demoralize the shop's work enjoyment. Your pizza is what put you on top and is also what can take you back to the bottom of the heap.
So , what should you do ? Start with what you can control. Evaluate the use of energy by your equipment , and your employees , in your day to day operations. Ask yourself if all of your energy usage can be deemed as vital or wasteful. Is the refrigeration and cooking equipment up to date on maintenance ? Do my employees know about the need for energy conservation , i.e. leaving lights on , or water running , when not in use ? All of these can lead to an enormous amount of energy savings that will be realized immediately , once corrected and brought into line. Another thing to consider is the well fare of delivery drivers and their own pocket book crunch. Study your delivery area and find out where the most expense vs. profit is. Are you better off eliminating the fringes of your delivery scope , or would you be saving the driver gas money by encouraging fuel efficient vehicles to deliver the outlying area deliveries ? You can discuss the importance of them maintaining their vehicles to realize a larger profit from each delivery.
Something that seems to be off limits is trying to renegotiate an active contract with suppliers. The rise in energy cost has hit them as well , and not only are they passing the cost on to you , but they have also had to re-structure their own supply chain. This could mean that you start , suddenly , receiving cubed cheese instead of your normal shreds , or a new tomato paste , which may be whipped instead of pureed. They are trying to reduce their own freight issues by lessening the weight of each load that they deliver to you. Some people have said they were unaware of this , while others are unwilling to speak up , when they find out for fear of loosing , or damaging , a long standing relationship. When such an event occurs , the weight and measurements of your own recipes can be drastically altered , and thus run up your cost and change the taste of your pies. This is why it is vital to realize the power you , as an owner , hold in your ability to renegotiate a supplier contract. These guys are more than willing to hear you out and work with you to save some money and keep the quality they know you , and your customers , expect.
I hope this has answered the concerns , and questions , so many of you have raised . If there is anything you feel I've overlooked , please feel free to comment on any of my articles , and let others know how we can all work together to keep the independent pizza shop ahead of the big boys. Merry Christmas.
Larry
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