Operators of local pizza parlors and pizza chains are grappling with inflationary pressures that are increasing the cost of gas, labor, food and supplies. At the same time, rising credit card interchange fees, also called swipe fees, are another significant cost center negatively impacting the bottom line.
A recent market analysis by ReportLinker, projects the global pizza market to grow by $51.38 billion, accelerating at a compound annual growth rate (CAGR) of 6.11% between 2022 and 2026. According to this report, key market drivers include the “increasing consumption of pizza in developing countries, the rising popularity of fast-casual pizza restaurants, and growing consumer inclination toward vegan pizza.”
While growth is forecast for the pizza market, operators of local pizza parlors and pizza chains are grappling with inflationary pressures that are increasing the cost of gas, labor, food and supplies. At the same time, rising credit card interchange fees, also called swipe fees, are another significant cost center negatively impacting the bottom line. In fact, these swipe fees rank as one of the highest expenses for restaurants behind the cost of food and labor.
As inflation and swipe fees eat into already razor-thin margins, pizza restaurant operators are turning to technology including feature-rich point of sale (POS) systems to help them operate more efficiently and reduce costs.
A slowdown in global economic activity is causing inflation to spike higher than seen in several decades. According to International Monetary Fund, global inflation is forecast to rise from 4.7% in 2021 to 8.8% in 2022 and decline to 6.5% in 2023.
With inflation on the rise, restaurant operators today are seeing a 17% increase in food costs and a more than 13% increase in payroll expenses, according to data from the National Restaurant Association.
Credit and debit card processing fees, which are paid as a percentage of every transaction, have more than doubled over the last decade. According to the Merchants Payments Coalition, these fees cost merchants, including restaurants, $137.8 billion in 2021, increasing from $110.3 billion in 2020.
To help mitigate the cost of inflation and swipe fees, pizza restaurants and chains can leverage innovative, scalable digital payment processing technology designed to increase efficiency, reduce costs, improve customer experience and drive growth.
Advanced POS systems designed to inject efficiency into operations are an effective cost-reduction tool for pizza restaurants and chains. A POS system that combines payment processing with restaurant management software streamlines operations to help restaurants run smoother and more efficiently. Using this technology, restaurants can take orders, accept payments, organize inventory, manage team members, maximize productivity, and grow their customer base.
Robust inventory tracking and reporting in a POS system are particularly important for efficiently operating pizza restaurants which typically have to manage inventory levels of a wide range of raw ingredients. And for pizza operators that offer delivery, efficiency is boosted with a POS system that seamlessly handles online orders and helps manage deliveries and drivers.
Advanced POS systems can also fuel growth by providing a range of payment options. Customers today expect to pay for goods and services in a way that is most convenient for them. And for many consumers, that means credit and debit cards. A 2022 Diary of Consumer Payment Choice report by the Federal Reserve Bank of San Francisco found that consumers continue to use credit cards and debit cards for a majority of their payments, accounting for 57% of total payments in 2021 compared to 55% in 2020 and 54% in 2019. Today, POS systems allow pizza restaurants and chains to provide a frictionless payment experience, making it easier for consumers to pay their preferred way. Accepting multiple forms of payment helps restaurants elevate the customer experience which is key for attracting and retaining customers and driving growth.
POS systems can also help pizza parlors and chains implement customer loyalty programs designed to increase sales and growth. The technology’s customer engagement features allow restaurateurs to make announcements, send custom promotions and track the effectiveness of marketing campaigns.
With these and other advanced features, digital payment processing solutions designed to scale with business requirements are becoming the vital tool restaurants need to increase efficiency and reduce costs.
Today, as pizza restaurants and chain operators navigate rising cost pressures associated with inflation and increasing swipe fees, innovative POS technology can help them remain resilient in the face of these challenges.
Ben Ross, COO of Green Payments, leads a disruption in the traditional way merchants and consumers communicate through transactions. Ross is a skilled professional in establishing merchant relationships, enabling Green Payments to elevate industry standards from a unique perspective. Ross utilizes his expertise and dedication to the mission of empowering merchants of all sizes to achieve financial freedom through minimizing fees within an already turbulent, make-or-break market.
