$0.60 is the cost of cheese for the average pizza pie.
$0.24 is the cost of dough.
$0.05 is the cost of sauce.
$0.84 is the average cost of making pizza.
In NYC, the average pie sells for $16.98, with the food cost being about 4.9%.
I just read an article saying dollar slices are going extinct in NYC due to inflation, but with margins like that, how would it be possible?
It’s less inflation and more of just rent in NYC.
In New York, retail space averages $45 a square foot per year.
Which the average pizza place is about 1,200 square feet, putting that rent cost at $54,000 a year.
That means 3,180 pizzas need to be sold yearly to cover rent at the $16.98 price, without factoring in things like labor, ingredients, boxes, energy, insurance and more.
At $45 though, that study factored in all of NYC and parts of long island/westchester also.
Manhattan, where dollar slices are famous gets crazier, where rent can go anywhere from $100 a square foot to $1,000.
That makes it so certain pizza places could end up spending over $200,000 a year in rent a year.
After that, there’s the cost of retail workers in food, which average $15-18 an hour for staff.
I genuinely think too many changes in pricing are being blamed on inflation and while a big issue, it’s not the core problem.
My guess is with NYC and dollar slices, it’s less inflation and more of just rent prices making dollar slices always a tough model to use, when there are pizza places in NYC spending over $500,000 a year on rent.
