Some of the most important factors when attempting to operate a restaurant profitably are the operating costs that must be monitored to reflect current market conditions. Comparing cost percentages to restaurants with similar menus and service levels can show if a pizzeria’s operating costs are in line with industry averages. For example, most successful restaurants usually generate food costs averaging in the 27 to 32 percent range of sales; however, the percentages for pizzerias can run a bit lower down to 20 percent. Likewise, general category restaurants usually generate beverage costs in the 20 percent range of beverage sales. However, pizzerias can run as low as 15 percent of beverage cost. Any way you slice the pie, operating costs are critical to a pizzeria.
The costs of two staples, cheese and diesel fuel, both trended up for May, while wheat and gasoline went down. The price of cheese crept up to $1.46 per pound on the Chicago Mercantile Exchange for mid-May, representing a 5 percent increase above the month prior. At $3.10 per gallon, the nationwide average price for diesel fuel was up 35 percent from the $2.30 per gallon average at this time last year.
Better news was that the price of wheat went down 22 cents from the previous week on the Minneapolis Grain Exchange, closing at $5.08 per bushel. The average price of regular unleaded gasoline went down a bit too. Figures from the American Automobile Association the Oil Price Information Service both show that the nationwide average for regular unleaded gasoline was down 4 cents from the previous week at $2.87 per gallon on May 17th. Although prices are relatively flat right now, they are up nearly 25 percent from the $2.31 per gallon average cost at this time last year.
Among the many different factors that come into play when operating a pizzeria, menu pricing and how it relates to and food and beverage costs are some of the most important issues that need to be addressed. In order to offer a good price/value relationship to customers and operate profitably, it can be helpful for owners to compare their own prices with competitors.