The cost of cravings

The price of pizza just went up at the pump

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Three-dollar-a-gallon gasoline is taking some of the dough out of your neighborhood pizzeria.

The economics of delivering hot pizzas to customers' front doors is unavoidably being altered this football season by the cost of regular unleaded.

In some cases, shop owners are taking the brunt of energy costs. In other cases, delivery drivers can only watch as rising fuel costs take a bite out of their incomes. And that's in spite of the fact that employers have increased the stipend they give drivers to help offset the cost of driving their own vehicles.

"We're asking our customers to maybe do more for the drivers. Right now, the drivers are on the edge," said Todd Rutten, owner of Domino's Pizza in Steamboat Springs. "We're asking our customers to think of the drivers. Our customers have been great so far."

Rutten is asking customers to be generous when they tip delivery drivers.

Like most pizza chains, Domino's offers coupons and discounts from regular menu prices. Nationally, Domino's offered three single-topping pizzas for $5 each this summer. Rutten offers $6 pizzas for customers who are willing to pick them up at the shop.

Paul Wright, marketing director for the Steamboat Domino's, said company officials spent a long time deliberating before they instituted a $1 delivery fee about 18 months ago. That was done more to offset rising insurance premiums. In addition to requiring that drivers carry adequate vehicle insurance, Rutten carries insurance to protect his company in case of a delivery mishap.

During the past 12 months, Rutten said, he has increased the per-order stipend he gives drivers from 60 cents to 80 cents, and more recently, to $1.

It's a slightly different story at independent Soda Creek Pizza, where, at least during fall, owner Steve Hitchcock's drivers always use a pair of well-maintained high-mileage Subarus to deliver the pies.

"For this summer, I'm the one taking the hit," Hitchcock said. "In my business, 70 percent of the deliveries are made in company-owned vehicles."

He charges customers a delivery fee of 85 cents an ------order, which, he said, represents about one-third of the cost of getting a hot pizza from the oven to a customer's front porch.

Steve Coomes, executive editor of Pizza Marketplace magazine, confirmed Hitchcock's numbers.

"Long before this current fuel crunch, operators would say it cost them about $2.50 every time a driver went out on a run," Coomes said. "That cost should be the same if they haven't increased drivers' reimbursements. If they have ---- and many have bumped that amount up -- it's still probably about $3."

Coomes said delivery fees are not yet the norm in the industry. But he thinks they are justified.

"A trickle ------ not a torrent -- of operators is moving toward charging for---- delivery," Coomes said. "In my opinion,

this gas crunch will force many more to do so. And why not? If the customer doesn't want to burn his gas, then let him pay to have it brought to the house. It's like going to a sit-down restaurant. If you want someone to wait on you, you have to tip."

Tips are increasingly important to pizza delivery drivers as well as for food servers in sit-down restaurants. Hitchcock said his drivers average $4 an order for his gourmet pizza. Hitchcock is not attempting to compete with national pizza chains on price. His business sets itself apart with the quality and variety of its ingredients. For example, customers at Soda Creek can order toppings such as grilled chicken, elk and pheasant.

Drivers at Soda Creek earn $6.50 an hour plus tips, plus a 6 percent commission on every order when they are driving their own vehicles. They can earn between $13 and $15 an hour when the pizzeria is busy.

Reuters news agency reported Sept. 12 that Domino's CEO David Brandon is signaling that his company may have to pass price increases along to customers if fuel prices stay at current levels.

Rutten said he has freedom to adjust his prices to the local market. Brandon said it's important to him that a job as a pizza delivery person still makes economic sense to drivers working at more than 5,000 Domino's stores in the United States.

Domino's driver Kevin Hanian said he puts about $100 of gasoline a week into his Subaru Impreza sedan. The actual amount depends on how busy the shop is.

Hanian said his car gets about 22 miles a gallon. All of the miles he puts on his car are because of his job.

"I ride my bike everywhere, except at work," Hanian said.

Jeff Hubler of Cugino's Pizzeria and Italian Restaurant said he always has charged a $1 delivery fee, which he passes directly to his drivers. All of them drive their own fuel-efficient vehicles. However, he's feeling the need to provide his drivers with a bigger vehicle stipend and will not pass that along to his customers.

"I'll just have to absorb it," Hubler said.

Hubler's business differs from that of Domino's and Soda Creek in that he has a dining room.

"We average about 20 deliveries a night," he said.

Hitchcock said that even in a gasoline-intensive operation, prices at the pumps aren't threatening the survival of his business.

"I spend between $2,500 and $3,000 on gas a year. If the price of gas is up 50 percent over a year ago, that's a $1,500 increase. That's not going to kill me -- it's $1,500 that isn't in my pocket."

Coomes said that, inevitably, independent pizzerias would find that higher fuel prices will just make the challenge of competing with national chains greater.

"It costs them just as much as a chain to deliver, yet their food cost is higher because they lack the chains' buying power," Coomes said. "So, yes, their margins are squeezed ever tighter by rising gas prices."

For pizzeria owners and delivery drivers, the key to fuel economy can lie in the luck of the draw. The optimum trip might be to deliver three orders to different resort condominiums, all within 400 yards of one another at the base of the ski area. An order of that size allows them to deliver a hot pizza pie on time without burning a lot of gas. The pizza delivery person's nightmare might be returning from delivering a single pie to Steamboat II, only to return to the shop to find another pizza destined for Steamboat's far west side.

Regardless of fuel prices, pizza delivery drivers will jump back in their cars and endure the inevitable stoplights on Lincoln Avenue to deliver the goods.

-- To reach Tom Ross call 871-4205

or e-mail tross@steamboatpilot.com

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