pricing workshop & confidential...5 year average pricing trend fairly consistent average price...
TRANSCRIPT
Pricing
Workshop
A n i m p o r ta n t b u s i n e s s l e v e r t o u n d e rs ta n d
PRIVATE & CONFIDENTIAL
Original Pretzel COG’s
6.1%
Regular Lemonade COG’s
13.0%
Dog Bites COG’s
26.7%Bitz COG’s
7.3%
PRIVATE & CONFIDENTIAL
System pretzel
prices
Original = $3.80
Flavored = $4.17
Cheese = $4.54
System Bitz and
dog prices
Wetzel Bitz = $5.06
Wetzel Dog = $4.65
Cheese Dog = $4.95
Dog Bites = $5.89
System drink
prices
Reg Lemonade = $3.61
Reg Frozen = $3.78PRIVATE & CONFIDENTIAL
• Dog Bites are priced like Pizza Bitz
but Pizza Bitz drives more profit
• Low priced Dog Bites franchisees
should consider and evaluate
raising price
Bark up the right tree with Dog Bites
Pricing
PRIVATE & CONFIDENTIAL
• Cheesy dog bites earn
$0.35 more in sales but only
$0.19 more in profit
• On average, raise price
$0.16 on cheesy dog bites
to maintain profit margin
Dog Bites: manage pricing differentials
PRIVATE & CONFIDENTIAL
What has
happened to
the value over
the years
✓ Reg vs lrg drinks in 2013 = $0.45
✓ Reg vs lrg drinks in 2018 = $0.41
✓ Orig vs flavor in 2013 = $0.33
✓ Orig vs flavor in 2018 = $0.36PRIVATE & CONFIDENTIAL
AA’s Pretzels Price
$3.72
$3.87
$4.41
$3.76
$4.12
$4.48
Auntie Anne's
Wetzels
Original CheeseFlavored
Sample of 35 malls with an Auntie Anne’s and Wetzel’s
$0.54
$0.36
• Wetzel’s and AA’s
price are similar
• Cheese
differential is
greater at AA’s –
this is an
opportunityPRIVATE & CONFIDENTIAL
Bitz are a pricing opportunity
• Wetzel’s is consistently
priced lower than
Auntie Anne’s
• Our product weighs the
same as their large
• Pizza Bitz represents
the biggest opportunity
• This will help maintain
margin
$5.36$5.54
$6.26
$5.04
$5.43
$5.74Auntie Anne's
Wetzels
Original PizzaFlavored
Sample of 35 malls with an Auntie Anne’s and Wetzel’s
$0.72
$0.31
PRIVATE & CONFIDENTIAL
Fresh baked
pretzels will
cost $4
• Remember the $1.99 barrier
• How much do consumers spend
• Chipotle meal = $13.50
• Starbucks latte & muffin = $8.75
PRIVATE & CONFIDENTIAL
5 year average pricing trend
Fairly consistent
average price increases
4% compound annual
growth which is roughly
3x the Consumer Price
Index
$3.04
$3.37
$2.91
3.36
$3.79
$4.15
$3.61
4.02
2013 2018
+$0.78
+$0.70
+$0.66
Original
Pretzel
Large
Lemonade
Flavored
Pretzel
Regular
Lemonade
+$0.75
PRIVATE & CONFIDENTIAL
Watch your Fresh Lemonade price
Lemonade seems to be overpriced
on average
Sales for the category are down;
aggressive price a contributor$3.15
$3.54$3.58
$4.01Auntie Anne's
Wetzels
Medium LargeSample of 35 malls with an Auntie Anne’s and Wetzel’s
$0.39
$0.43
PRIVATE & CONFIDENTIAL
The annual pricing exercise
See annual pricing recommendations
PRIVATE & CONFIDENTIAL
• Increase prices 2 – 3x per year
• Move around the menu, take small price increments
• Price in advance of events – minimum wage increases and holiday for example
• Seek ways to improve attachments of dips and drinks
• Know your mall – look at competition
• Study price change impacts through Treatware
Franchisees have said…
PRIVATE & CONFIDENTIAL
Pricing at WP’s
has less of an
effect on
customer
count than you
may think
Consider
value and
market
expectations
Understand
the effects
on you P&L
Top three hot ideas
PRIVATE & CONFIDENTIAL
Is it time to pull the
pricing lever at your
bakery?
Consider
COG’s
Consider
system
averages
Consider
value
(original vs
flavored)
thank you!
PRIVATE & CONFIDENTIAL