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In reply to the discussion: From an Ex CEO: Why John Schnatter's comments about a 20 cents add on are laughable. [View all]grantcart
(53,061 posts)7. no point #1 is not overstated
so in theory, the papa john's ceo have a point. if a 3% increase in pizza prices means only a 3% drop in pizzas, then the revenue would be similar but the cost would be less. in practice, however, this is too small a change to result in a noticeable savings in labor costs. individual stores are unlikely to be able to reduce headcount even by one person from such a small decrease in demand. moreover, papa john's is a franchise business, so these costs are borne by franchisees, not corporate. corporate has no need at all to raise their prices, and many of the franchises would be exempt because they have fewer than 50 employees.
Your point would be valid only if the increase is to only Papa John's and not to any of his competitors.
Here we are talking about a marginal increase in cost and all pizza manufacturers will bear the exact same cost increase so there is no particular disadvantage to Papa John's. The only argument he could make, and it is not the argument that he is making is that the increase would be destructive to the entire pizza industry.
When gas prices go up, for example, they don't go up for Papa John's and not for his competitors, they go up equally for all. In the same way his comments have absolutely no relevence in establishing Papa John's market share and every CEO knows it and they chuckled when he said it.
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From an Ex CEO: Why John Schnatter's comments about a 20 cents add on are laughable. [View all]
grantcart
Aug 2012
OP
Actually CEOs are usually very rational in the area that they first progressed in
grantcart
Aug 2012
#9
no, there are certainly industry-wide cost increases that can lead to industry-wide price increases.
unblock
Aug 2012
#28
I noticed it as well but thought that most people would drop out before getting there lol
grantcart
Aug 2012
#10
thanks, I only have a few minutes a day to go on to DU so I won't have time to place it elsewhere
grantcart
Aug 2012
#40
K&R but some of us were pointing this crap out when he was just getting his business up
Egalitarian Thug
Aug 2012
#11
Papa John's major competitive disadvantage is that their pizza tastes like ass.
Warren Stupidity
Aug 2012
#15
Grantcart, thanks for giving details on how an enlightened business is run well.
freshwest
Aug 2012
#42
What Papa John's would never admit and may not be smart enough to understand
JDPriestly
Aug 2012
#47
He showed not only contempt for his employees, but contempt for his customers as well.
Vurz
Aug 2012
#50
i would never eat that disgusting pizza, I would happily donate an exta 20 cents to
smirkymonkey
Aug 2012
#65