Pizza Today - July 2022 - 41

decisions to withstand the pressure,
including:
Re-evaluating purchasing
habits
When faced with rising food costs,
Gill Stansfield, a faculty member at
Johnson & Wales University's College
of Food Innovation & Technology who
also oversees the College's purchasing
and procurement, says operators must
be in regular, respectful dialogue with
their vendors.
" Ask vendors about closeouts or
bonus buys, " he says.
If vendors have products they need
to move, a creative culinary pro can
likely craft enticing specials around
those items, such as a limited-time
rainbow pizza using rainbow tomatoes.
In addition, Stansfield urges operators
to consider local product. While
marketing dishes filled with local items
is itself valuable, there is also sound
financial rationale for purchasing local
goods, namely the ability to escape
onerous transportation charges.
Stansfield also recommends independent
restaurants consider joining
a group purchasing organization. In
such a collective, operators can capture
buying power akin to a larger chain as
well as access to rebates and marketing
perks.
" Given what we're seeing with inflation,
it's entirely worthwhile to investigate
if a group purchasing organization
is right for your business, " Stansfield
says.
Reducing and revamping the
menu
Doug Roth, a veteran restaurant
consultant who heads Chicago-based
Playground Hospitality, is currently
working with various restaurants slicing
their menus 25 to 30 percent to
boost profitability and inform smarter
purchasing.
To begin, Roth suggests pizzerias
properly cost out each menu item.
Thereafter, define which items are top
sellers, have low food costs or possess
high gross margin. Those are the keepers,
he says. The rest, including items
that rarely sell, carry inflated costs or
require ingredients with volatile prices,
are best eliminated.
Armed with popular dishes and
low-cost, high-margin items, Roth says
operators can then re-engineer their
physical menu to encourage guests to
order the most profitable items. The
first or last items on the menu, for
instance, regularly draw attention as
do those placed in boxes or paired with
photos.
" Create interest behind specific items
and direct the eyes to items that will
help you be more profitable, " he says.
Adjusting employee compensation
and strengthening culture
King calls hourly labor the " first and
most acute " inflationary pressure felt
at Donatos. In the opening months of
2022, labor costs climbed nearly three
points as a percentage of sales as the
chain heightened its starting wage for
hourly workers and drivers while also
increasing the rate for those opening
and closing stores.
" There's enormous pressure in the
industry on raising wages at a time
when we are already short staffed, " says
King, whose company also introduced
tip pooling at its restaurants.
In response, Donatos has focused on
enhancing its onboarding and training
to create lively workplaces where
employees feel valued and supported,
which reduces turnover costs and
boosts productivity.
" Our best managers have the least
trouble staffing their stores, " says King,
adding that Donatos also instituted an
employee tracking system to respond
faster to applicant interest.
Raising menu prices and
reducing portion sizes
Though raising menu prices is not a
popular option, such a move has been
hard to ignore amid escalating costs.
Pizzerias, after all, can only absorb
inflation's punishing hits so long.
Eateries across the country have
increased menu prices to offset surging
inflation. In fact, restaurant menu
prices jumped 6.4 percent from January
2021 to January 2022, the highest oneyear
leap the BLS had recorded in four
decades.
" As inflation looks permanent and
not temporary, you have to adjust prices
accordingly to compensate, " says King,
whose chain raised its delivery fee from
$3.85 to $4.49 in March to combat
rising food and gas costs. " These are
gut-wrenching decisions, but you have
to layer in increases where there is
opportunity. "
One alternative to raising prices on
menu items is reducing portion size, a
practice commonplace with consumer
packaged goods. A sleeker portion size
allows a restaurant to hold the line
on price and quality while countering
inflation through reduced ingredient
use or higher yields.
" Now, you have to be careful here
because people are still looking for a
value orientation, but reducing the size
of items while maintaining price and
quality can be a viable option, " Roth
says.
To date, King has resisted altering
portion sizes at Donatos. Instead,
he's pulled other calculated, inflationbattling
levers, such as testing an
automatic saucer at stores to improve
productivity, drive consistency and
reduce waste.
" We're not changing portion sizes
because we don't want to sacrifice what
people have come to expect from us, "
King says.
DANIEL P. SMITH Chicago-based
writer has covered business issues and best
practices for a variety of trade publications,
newspapers, and magazines.
JULY 2022 / PIZZATODAY.COM / 41
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