What I've heard from friends who've worked in pizza delivery places, as well as making it from scratch myself on occasion, the margins are insanely high. Which makes sense considering it was originally a peasant food.
Pizza dough is just flour. yeast and water. All of which cost pennies. Sauce is slightly more expensive, but you can make something which tastes pretty close to fresh with some canned tomatoes and spices which also cost pennies. Cheese is cheap, there's no need to use fresh expensive mozzarella when you're blasting it in the oven anyway, the low quality pre-grated stuff will turn out pretty good too. Toppings are usually fairly low quality, which again doesn't really matter when they're scattered on a pizza.
When I make it at home it usually costs me about £3, and that's indulging myself with better quality ingredients like fresh mozzarella and tomatoes. Delivery places can get it down to £1, including toppings, and sell it on for £10. The staff are all on minimum wage, you don't need much space if you don't have seating, and at least where I live in London 9/10 delivery drivers use mopeds which are cheap to run.
Compare that to Munchery, where looking at the site they're offering fresh vegetables and cuts of meat for probably similar prices to pizza and you can see where the problem lies. That and being based in SF I have no doubt they've gone full Silicon Valley with their offices (communal spaces, very high sq/ft per employee, high wages etc) and it becomes clear why their business model is probably not sustainable.
You don't have to work out COGS for a restaurant from first principles. Food costs are one of the most discussed and reported topics in the restaurant business, and all major food businesses optimize them.
Which means this isn't a persuasive answer to the question 'tzs asked. Lots of restaurants have low food cost. And pizza restaurants aren't the most efficient category of restaurant. Why don't the even-more-efficient kinds of restaurants deliver too, if pizza's food cost sets some kind of frontier for viable delivery?
> Cheese is cheap, there's no need to use fresh expensive mozzarella when you're blasting it in the oven anyway
If you want a crappy pizza, then yes, you can cut on quality. A good mozzarella can make the difference.
Of course you need also the other ingredients to be of good quality (and prepared in the right way): if the bread feels and tastes like cardboard there is no point in spending money on mozzarella.
I totally agree about toppings. These days they use turkey bologna as pepperoni. Cheese comments are right on too.
They buy Part Skim junk cheese when in USA we subside the crap out of milk (real cheese). They just skimp on every detail to maximize profit.
The regional pizza chains exist because they deliver to bad neighborhoods and stay open until 3am.
None of these places do much to prove their pizza dough.
Pizza dough is just flour. yeast and water. All of which cost pennies. Sauce is slightly more expensive, but you can make something which tastes pretty close to fresh with some canned tomatoes and spices which also cost pennies. Cheese is cheap, there's no need to use fresh expensive mozzarella when you're blasting it in the oven anyway, the low quality pre-grated stuff will turn out pretty good too. Toppings are usually fairly low quality, which again doesn't really matter when they're scattered on a pizza.
When I make it at home it usually costs me about £3, and that's indulging myself with better quality ingredients like fresh mozzarella and tomatoes. Delivery places can get it down to £1, including toppings, and sell it on for £10. The staff are all on minimum wage, you don't need much space if you don't have seating, and at least where I live in London 9/10 delivery drivers use mopeds which are cheap to run.
Compare that to Munchery, where looking at the site they're offering fresh vegetables and cuts of meat for probably similar prices to pizza and you can see where the problem lies. That and being based in SF I have no doubt they've gone full Silicon Valley with their offices (communal spaces, very high sq/ft per employee, high wages etc) and it becomes clear why their business model is probably not sustainable.