Pizza price range of Japanese major delivery chain is 2000yen to 3000yen (M = 2000yen L = 3000yen). Some pizza delivery chains sell pizza at 1000 yen. A first cost of raw materials for manufacturing pizza is said to be 10% to 20% of selling price. This is only the first cost when stocking raw material foods. But there are so many costs that make selling prices raise other than first cost, needless to say.
For example, labor cost.
In Japan, pizza delivery labor cost is a bit more expensive than other restaurant businesses.
If someone is dispatched to delivery pizza to a customer where it takes 20 minutes one way, one person is bound by at least 40 minutes for round trip.
If delivery’s staffs’ salary is 900yen per an hour, one pizza delivery simply takes 600yen of labor cost . Plus, also takes labor cost of staffs making pizza, and expenses of petro. Petro price has raised these days, which is one of the reason to make pizza selling price more expensive.
Moreover, an insurance to prepare when delivery staff causes a car accident is, of course, looked as a cost. Even if just one person causes a traffic accident, insurance premium rate goes up. From this point of view, delivery companies are really sensitive about a traffic accident to protect profit.
To run a pizza shop, you must not forget the very basic running costs which is fuel and light and water expenses. Especially, during full operation, there is no time for ovens to take a break. As you imagine, fuel and light expenses are quite heavy cost to run a shop.
How you can let people know that your pizza shop is opened and recieving orders? No matter how famous the major delivery company is, unless you make effort to have people recognized that a pizza shop is opened in the area, you can sell no pizza a day. So of course, ads cost is essential to attract people to buy pizza. Bill, leaflet, poster, newspaper insert, CM are necessary selling method.
When you start thinking of cost of motor cycles, and its maintenance and its insurance, it feels like all the cost concerned with this business is endlessly a lot. Of course, these costs are commonly taken no matter which country you do this business
What do you think that makes conclusively pizza price differ between Japan and your country? If compared with the United States, the following things are probable factors.
- Stock price
- Minimum wage
- Sales amount
Stock price
First cost is decisively different between Japan and other countries. In my sense, food price in supermarket in the United States is averagely one third of food price in Japan. Some of them in the United States costs half of that in Japan. You might understand why from the view point of food self-sufficiency rate, production amount, sales amount, one time transport amount. 64% of foods on the Japanese market relies on overseas food market on production rate basis. Importing costs are added on and influential to selling price.
If you see these factors, you get to know how expensive raw material foods are in Japan
Minimum wage
Japanese minimum wage is 790yen per an hour . This is not really different from American minimum wage which is 7.25 USD. In Japan, because of lack of manpower of manual labor in retail industries, Japanese companies try to raise up minimum wage to secure labors. In Tokyo or in other metropolitan area in Japan, manual labor’s minimum wage goes up to 1000yen or more. Especially, delivery food industry competition for labors is much more intense day by day because this business doesn’t really work without people.
In the United States, there is a unique habit that the company guarantees at least minimum wage is regulated by the government to manual labors but how they can earn more is labors’ business so tip system is introduced in its society.
And people who work for a company that guarantees only minimum wage are mostly illegal immigrants from the countries of South America. They don’t complain about their work with very small salary because their carrier decision is quite limited due to the fear of revelation against smuggling. Some of companies take advantage of their weak situation and demand unjustifiable salary rate of them regardless of whether they will accept it or not. These factors suppress labor costs from raising up.
Sales amount
In the United States, pizza is perfectly regular meal. American can accept eating pizza for breakfast, for lunch and for dinner. Pizza has been rooted in American lifestyle for long time. It is no wonder that there is a person who order pizza for dinner every day. Putting it simply, pizza consumption rate in the US is beyond comparison with that in Japan.
In my sense, I order pizza in special occasion like a party. In Japan, I recognize ordering pizza is not as easy food as eating every day. We Japanese are not really familiar with eating pizza.
The more number of selling increase, the smaller selling price becomes relatively. In addition to that, so many competitors in the market is one of the reason to surppress the selling price.
Sorry, but the article doesn’t make too much sense. Why does this apply only in pizza and not other delivery foods (burgers, chicken, etc.)?
Stock price, minimum wage, delivery costs and all the reasons mentioned apply to all delivery foods in Japan, yet only pizza is so ridiculously expensive.
I thought that too, mozzarrella is expensive though I’ve found sites that sell 1kg for 1200 yens.
The problem is that cheese in Japan is bad, so premium cheese is around 2500 to 3500 yens per kilo.
If you use great cheese in your pizza then in a large one you’ll be using around 300g to even 400g of cheese that’ll be 900 yens only on cheese add other ingredients like flour, butter (also expensive) and beef or anything.
Raw price around 1500 to 2000 yens for a large one.
Sounds like we need a vertically-integrated pizza restaurant that runs its own dairy and farms.
Or, perhaps more practically, a vertically-integrated farm that runs its own pizza restaurant.