August 9, 2012

• Pizza price smackdown!

  (In the interest of being transparent, I have tried Papa John's pizza and find it.....lacking. This, however, is not a pizza review.)

  Would you support a twenty cent price increase in your pizza costs?

  

  John Schnatter, CEO of Papa John's pizza states that pizza price costs will have to go up because of Obamacare. 

  He states in an interview : "Let's say fuel goes up-- which it does from time to time-- and we have to raise  delivery charges … We don't like raising delivery charges, but the price of fuel  is out of our control as is Obamacare. So if Obamacare is in fact not repealed,  we will find tactics to shallow out any Obamacare costs. And of course  strategies to pass that cost onto consumers in order to protect our  shareholder's best interest,"
  Read more at  http://www.christianpost.com/news/papa-johns-price-increase-blamed-on-obamacare-79669/#SrGhgVkzLx3xAMpk.99

  It's common business practice to pass along price increases to consumers when the price of producing that product goes up.  Otherwise, it would be impossible for business owners to stay in business.

  Note, however, that Mr. Schnatter links fuel prices and Obamacare together. 

  Delivery is a major part of the Papa John franchise plan.  "Better ingredients, better pizza-Papa John's and then you see Mr. Schnatter delivering to the soccer field, etc".  Sound familiar?    Thus the cost of fuel is something that should be considered when the pricing scale is devised.  You have to pay for the "raw materials", which in this case, do not produce your product, but do factor largely in the delivery of that product.

  There are a variety of ways to keep prices down on products, unless, of course, you are targeting the upper economic levels for your product.  Discount Lexus just doesn't sound right somehow.

  A producer can find ways to decrease cost by using cheaper materials, cheaper packaging or by changing how the product gets to the consumer.  Care must be taken to insure that the quality does not go down or the consumer group will take it's business elsewhere.

  Note here that the ridiculous cost of fuel does not incur the same wrath as does providing health care for employees, without whom, Papa John franchises would not have producers of their product.  Apparently the workers are not in the same league as say, shareholders.  (Further in the article, Mr. Schnatter states that the shareholders must be kept happy.)

  The food industry is one area that I, for one, would like to see workers at optimum health.  Since the health care law provides for more checkups and preventative care, I would think that the productivity of workers might actually go up.  But here's another aspect:  Without health care, workers tend to let things go until they become critical.  How would Mr. Schnatter feel if, say, one of his counter workers had contracted TB, did not have insurance to see a doctor and worked for a period of time, merrily infecting everyone they distributed food to or gave change to?  If the public's image of Papa John's changed from smiling man with pizza to an image of an iron lung, I suspect that the public would stay away in droves.  The damage to his company might just be insurmountable.  Those health-care charges might seem pretty cheap then.

  My personal feelings are that a twenty cent increase on the cost of pizza won't keep people from buying pizza.  Actually, the general health of Americans might improve, driving down the costs of health-care, if we ate LESS pizza.  I include all pizza in that, not just Papa John's.

   

  

   

  • 8:21 am
  • 4 Comments