Powered by Blogger.

Saturday, March 26, 2011

The pizza firms slicing a 900% profit off your delivery: £1.25 to make a Margherita... but you pay £12.49

By Sean Poulter

Pizza delivery firms are cashing in with a price mark-up of up to 900 per cent, industry insiders have revealed.

Sales are rising at a time when more people are trying to save money by eating in rather than dining out.

Yet customers may be unaware that while they are being charged £12.49 for a large cheese and tomato Margherita pizza, it has been made with ingredients costing just £1.25.

Some of the 900 per cent mark-up can be explained by the fact the Government takes its own cut, with VAT at 20 per cent.

The firms also have other costs, including rent, rates and wages.

But leaked details of the prices paid by the major pizza chains for their ingredients demonstrate how there is still huge money to be made.

The figures relate to Britain’s biggest home delivery pizza chain, Domino’s – where profits rose by 27.3 per cent in 2010 to £38million – but are typical for the industry.

All the ingredients are bought in bulk and so are cheaper than if they were bought on the high street.

To make the large Margherita, the businesses are paying just 55p for a large base, a maximum of 14p for a ladle of tomato sauce and 56p for 154g of cheese – accounting for the £1.25.

They can add five toppings to make a deluxe pizza with 4p worth of onions, 11p of mushrooms, 13p of green peppers, 19p of pepperoni and 21p of sausage – a total of £1.93.

Yet, when it is delivered to the customer, it comes with a bill for £17.99 – a difference of £16.06 or 832 per cent.

Chef Aldo Zilli, who has launched his own range of pizzas for restaurant chain Prezzo, said: ‘I would always avoid takeaways as they do overcharge and the ingredients are often processed and unhealthy.

People can avoid extortionate mark-ups on takeaway pizzas by creating their own at home: vegetables for the toppings such as peppers and red onion cost hardly anything and pizza sauce can be made from a tin of tomatoes with some chopped garlic and onion.

‘Making dough is also cheap and a great thing to get kids to do.’

A spokesman for Domino’s Pizza, which is run on a franchise basis, said the mark-ups were typical for the industry.

He added: ‘In common with all food businesses, raw ingredients make up a relatively small portion of the total costs.

‘The majority of cost is in rents, business rates and especially labour, which is an area we tend to spend more than our competitors on as we have such a fanatical focus on service times.

‘Franchisees also contribute to the national advertising fund and bear the costs of local marketing of their businesses.’



Post a Comment

Note: Only a member of this blog may post a comment.

Twitter Delicious Facebook Digg Stumbleupon Favorites More

Top Web Hosting | manhattan lasik | websites for accountants