5 Reasons to Raise Your Prices Today

When was the last time you raised your prices? If it’s been a while, what’s stopping you? Look around. You’ll notice that prices are going up everywhere on everything. Today is the day to raise your prices, and below are five reasons why.

Reason #1: You’re Worth It. If you are pushing out a good product that customers cannot get from the guy down the street, your prices should reflect that. You will not lose as many customers as you’re afraid you might, and if a few do disappear, they’ll be replaced by those willing to pay for the quality you’re providing.

Reason #2: Costs Continue to Rise. As I mentioned before, the cost of everything around you is rising, from gas, to produce (have you bought a lime lately?) to wages. If you don’t raise your prices, you’ll find it more and more difficult to pay for these everyday costs.

Reason #3: You Want to Grow. If you ever expect to grow your pizzeria and your staff, allowing for new offerings and possible expansion in the future, you’ll need the capital to make it happen. A price increase can help to fund these dreams.

Reason #4: You Are Currently Undercharging. It’s pretty safe to say that you’re probably undercharging for some–if not most–of the items on your menu. Average food cost is usually around 31%. Is that your current average? Check out this handy guide to figure it out.

Reason #5: Customers Expect It. Believe it or not, with every business around you raising prices, your current customers almost expect to see your prices go up, especially if it’s been a few years since the last increase. Just let those who question your decision know that raising prices is necessary in order to continue providing the quality of food and service they’ve come to expect. Not many people can argue with that.

Have you raised prices recently or thought about it? What has been the reaction, or what are your concerns? Let me know in the comments.

2 Responses so far.

  1. Kirk V. says:
    Hi Liz,
    This is a great summary. We have chosen to NOT raise our prices up until this point. It has been over seven years since we opened in Sept 2006, and no price increase. Crazy right? Well, we were growing at a pretty good rate (double digit growth) and given the recession and other things, we decided to absorb the increases in just about everything.

    However, in the past year or two, we now have mid-single digit growth and we are getting hurt. So, last year, we announced that we will have our first price increase in 2014. We are looking to add a couple items and modify prices accordingly.

    I believe in being transparent to our customers. We will let them know what we are doing and why. I am sure we will get a lot of grief, but as you said, we should never be the cheapest…and quite frankly, we are in some cases.

    We have a good base and I trust they will continue to take care of us as we have done for them these past years. I mean really, what costs the same today that it did in 2006? I would say NOTHING…well, except a slice or pie from us. We do currently have a cheese surcharge on all whole pies to help cover the ridiculous rise in cheese prices, but that will come off when the price goes back down.

    Thanks again for posting the great summary.

    A Slice of New York
    San Jose/Sunnyvale

  2. Liz Barrett says:

    I'm glad to hear that you're raising your prices. I think you'll find that it has a very positive affect on your bottom line and less push back from customers than you might expect.

    Good luck!