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Just to provide some context... sometimes the best thing a business can do, if it wants to remain profitable, is to "get rid" of the customers who cost them money. And kids who buy french fries, and take up a table during a busy time, and take too much ketchup? Not necessarily the most profitable customers...
As for your assessment that they probably still made money, since the food cost was probably only 30% of what they charged, you're forgetting payroll, rent on the building, taxes, equipment costs, and many other costs. Running a restaurant is expensive!
no, it was a low class area, the business was on the ground floor, and on top, it was a low income housing area, it was not that safe. they did not have much customers on a daily basis, if they do, its usually a delivery of a pizza. everytime we went there is either no customers inside or 1 person eating, even on dinnertime and lunchtime. there is about 6 tables, I never seen it once filled up with 6 tables, the most I seen was maybe 3 tables filled up. I was just a mom and pop pizza take out/delivery place, renovation is really bad and dirty.
now, its a gentrified area, and rents have quadrupled. If we went there 5 times a week, and they average even 2 bucks profit per time for 5 kids, thats 10 bucks per week, or 520 dollars per year, and We went there for 10 years... 5200 dollars....some profit is still better than no profit. and besides, we sometimes bought drinks, hot wings, and pizza, but for the most part it was fries.
oh yea, the payroll part, it was just a dad working there by himself, and during dinnertime the son comes and help out, they really had the attitude that they are superior because they own a business, and sometimes I hear them whine about the rent or other businesses opening around them.
I also have been to a small hardware store around seattle, the guy was a prick, and I went there just to buy 1 screw that fits my lid for my pot, I wanted to just buy one, and it has to not rust (stainless steel). it came in a pack of 4, and I asked if they have just 1, because I will most likely throw the others away. the guy just called me cheap, and I just left for home depot.
Personally I would blame the shoppers, not the store. People are free to shop wherever they want. If they choose the large chain over the mom and pop place so be it.
I would bet that for the mom and pop pizza stores, their material and electricity for making a large 1 topping pizza would be about 5 bucks already.
Its just like mcdonalds, you can get a mcdouble for 1 dollar, but if you bought the bun, 2 patties, cheese, and the electricity to make it, it might cost a dollar already.
You're not thinking about this in the right way. The $5 pick-up deal is on offer layered on top of their existing menu. The relevant costs here are the marginal costs, you're already paying rent, you're already running the machinery all day (it runs whether you're cooking a pizza or not) and you're paying your employees whether they are making pizzas or not.
Little Caesars wouldn't stay in Business if all they sold were $5 pizzas, the gross profit is too low on them. What Little Caesars is doing is just text-book business strategy, they are taking resources that would otherwise be wasted and making some extra $$ with them. There is no reason why a mom and pop can't do the same thing, the issue here that your typical mom and pop has little understanding of pricing strategies.
My mom has a business (dog grooming) and she used to sell retail as well. She had a tough time there because of all the places people could get dog food/toys/medicine items/grooming stuff cheaper than at her store. She also has quite a bit of competition in the form of other grooming facilities, but the people who go to my mom love her.
I for one don't see a lot of mom-and-pop stores anymore, but there are a few restaurants here and there and I try to eat there than at major food chains. Some people don't take credit cards, which may differ customers if that's all they've got, but I don't blame smaller businesses, being that it's very costly to have a credit card machine.
These chain places make everything cheaper and easier for customers to blast their local competitition and it's sad and maddening. People don't realize the true costs to society.
Little Caesars wouldn't stay in Business if all they sold were $5 pizzas, the gross profit is too low on them. What Little Caesars is doing is just text-book business strategy, they are taking resources that would otherwise be wasted and making some extra $$ with them. There is no reason why a mom and pop can't do the same thing, the issue here that your typical mom and pop has little understanding of pricing strategies.
the problem with a national chain and a mom and pops place is, that the food costs are less for the national chain. for example, the fries, buns, beef patties from mcdonalds are from a plant somehere in america, and they ship it out to the individual store. buying the same ingrediants of the same quanity, might cost a mom and pops place double, because they dont get it in bulk. its probably the same with pizza, little ceasers or dominos buys their dough, cheese, pizza boxes for much much cheaper.
its just like walmart, lots of their stuff is cheap, and if you wanted to open a store that sell the same stuff walmart has, you as the business owner might spend 10 bucks for a 5 quart motor oil jug, and charge customers 18 dollars, while walmart sells the exact same jug of oil for 10 dollars, which means you cant compete with them, they buy in super huge quantities that it will cost them less, or they have a deal with the maker of that product.
With regard to the pizza places in the op, do the mom and pops deliver? Their pizza has to be better than the chain store pizza but sometimes what you need is delivery.
With regard to the pizza places in the op, do the mom and pops deliver? Their pizza has to be better than the chain store pizza but sometimes what you need is delivery.
I haven't asked but im pretty sure at least 1 do, since there is 3 there. The problem with a mom and pop store is that sometimes they dont get as much customers, so their food is not as fresh, while a chain store might get new batches of food every few days. also, when a small restaurant has a huge order all of a sudden, they might not have enough of that kind of food.
I kind of remembered when I was volunteering a while back, it was for program for teens, and on the last day the kids, and their parents came to meet the volunteers and we ordered pizza. We called a local pizza place, and they cant produce 100 pizzas in 1 days advance, and the price would of been almost double, so we went to get it at dominos instead, for 5 bucks each pizza. and since that 1 store cant produce 100, dominos had another location produce the other half to add up to 100.
As a member of a family that ran a "ma and pop" retail operation for 20 years, I can say that many small businesses rely on word of mouth or reputation as their primary marketing technique. This can work excellently if the business is composed of good employees, but considering that many small businesses often only have two or three people (visibly) working for them, one bad hire, or one employee turned drug addict, etc. can make all the difference.
It seems as though the more major the purchase, and especially the more substantial the implementation process (e.g. installing carpet vs. setting up a TV), the more favored small businesses with a good reputation are. Perhaps that's the reason why there are no national chain car dealerships (at least that I know of), but it's very difficult to buy toothpaste or a notebook from a local store today.
Also, during better economic times small businesses can leverage their comparative advantage - flexibility, individualized customer service, etc. - more effectively than in times like these, when a 15% cost difference between a local and a chain store makes a far bigger dent in the customer's wallet and/or credit line than 5 or 15 years ago.
For restaurants, I think a big part of it is marketing. Not many local restaurants have ads on TV, and those that do rely on local production crews who generally produce a product that is subpar to the tantalizing commercials for national chain restaurants you see on TV. When deciding what restaurant they want to patronize, potential customers will remember the delicious-looking lobster or pasta or top sirloin on TV and opt for the chain restaurant, even if the price and quality are comparable or inferior to local restaurants. Chain restaurants also have much stronger branding, in general, than local restaurants. However, several new local restaurants have caught on to this, and have branding that makes them appear part of a much larger chain.
I prefer to eat at local restaurants whenever possible.
As a member of a family that ran a "ma and pop" retail operation for 20 years, I can say that many small businesses rely on word of mouth or reputation as their primary marketing technique. This can work excellently if the business is composed of good employees, but considering that many small businesses often only have two or three people (visibly) working for them, one bad hire, or one employee turned drug addict, etc. can make all the difference.
It seems as though the more major the purchase, and especially the more substantial the implementation process (e.g. installing carpet vs. setting up a TV), the more favored small businesses with a good reputation are. Perhaps that's the reason why there are no national chain car dealerships (at least that I know of), but it's very difficult to buy toothpaste or a notebook from a local store today.
Also, during better economic times small businesses can leverage their comparative advantage - flexibility, individualized customer service, etc. - more effectively than in times like these, when a 15% cost difference between a local and a chain store makes a far bigger dent in the customer's wallet and/or credit line than 5 or 15 years ago.
For restaurants, I think a big part of it is marketing. Not many local restaurants have ads on TV, and those that do rely on local production crews who generally produce a product that is subpar to the tantalizing commercials for national chain restaurants you see on TV. When deciding what restaurant they want to patronize, potential customers will remember the delicious-looking lobster or pasta or top sirloin on TV and opt for the chain restaurant, even if the price and quality are comparable or inferior to local restaurants. Chain restaurants also have much stronger branding, in general, than local restaurants. However, several new local restaurants have caught on to this, and have branding that makes them appear part of a much larger chain.
I prefer to eat at local restaurants whenever possible.
Unless I am traveling (As in on the interstate), this is my policy. I despise chains.
To me, a good restaurant is missing a trick if they don't employ inexpensive marketing efforts on social media channels such as Yelp or Urbanspoon. Not by putting up bogus raves (People can sniff those out a mile away. They just make you look dishonest), but rather encouraging customers to post their experiences. Heck, every week, I look on both those sites to see what restaurants are new in town so I know where to go. And when I travel elsewhere, I try to see what local eateries have to offer.
I kind of remembered when I was volunteering a while back, it was for program for teens, and on the last day the kids, and their parents came to meet the volunteers and we ordered pizza. We called a local pizza place, and they cant produce 100 pizzas in 1 days advance, and the price would of been almost double, so we went to get it at dominos instead, for 5 bucks each pizza. and since that 1 store cant produce 100, dominos had another location produce the other half to add up to 100.
Well, that's the difference between being a volume produce and a quality producer. If I'm throwing a kid's birthday party, Dominos is just fine. But if it's pizza for my family, then I wouldn't call upon a chain for all the money in the world. Too many good local places out there.
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