Michael ~ Pizza

We are in the pizza business, so you don't find me complaining a whole lot this year. We're down single digit percentiles, and all things considered, we feel extremely fortunate."

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“We are in the pizza business, so you don't find me complaining a whole lot this year. I mean, we're down single digit percentiles, and all things considered, we feel extremely fortunate. We sell pizza. Pizza has been fine.


We have a dining room, though. So that's the biggest thing that we've been missing is a lot of diners. But takeout has been great. I feel very fortunate to have made it through this year. And so far, no layoffs and no furloughs.


It’s December and we've got our first little staff outbreak of the year. We're just kind of navigating through it now. We'll have to see how it goes. I've been preparing for this as a bit of an eventuality since March.


Certain things have changed since March. In the beginning, we knew so much less than we know now. So we're not closing the restaurant to sanitize the surfaces, like we might have in March. We now know this is a respiratory disease. The biggest thing is contact tracing, figuring out when the person worked, who else was working at that time.


I have two locations, so having some staff out means there’s a little bit of a bobbin’ and weavin’ to get all the shifts covered. Some kids are going to go into overtime and they’ll be making 17, 18 bucks an hour, for 10 hours. We're just that short-staffed now. We're going to be able to keep the doors open unless we get, you know, a few more that become symptomatic and go into quarantine. From a staffing perspective, it's just been wild. I'm incredibly thankful to have great, great employees.


That's the biggest thing I've just been so proud of this year. So proud of my staff, and so happy with their resiliency. I’m one of the few people that has had a lot of faith in and felt very empathetic towards millennials. And now I'm one of the people that has a ton of faith towards Gen Z. I think that they're going to save the country. I think so highly of them. And these kids have all been great, you know, they're all stepping up.


And the community’s been so good to us. With online orders, people are adding $2 or $3 tips. And yet they're only going to be in the store for sometimes 30 seconds. I mean, they just walk in, say their name, and we hand them their pies, and then they're out. But they're still leaving two or three bucks on an online order, which is incredibly generous.


My job is to make the best damn pizzas and be consistent, be polite. Even when our supply costs jumped, we didn’t raise prices or do anything like that. This year has been really tough from the supply perspective. One of the things the average person doesn't know is that cheese prices spiked to all-time highs until just recently. And that was driven by a couple of things. One was a huge government purchasing plan. They bought a bunch of cheese to keep dairy farmers going. But what it did was just jack up the price to some pretty crazy levels. And then also, cheese consumption went up. Because a lot of the restaurants that were doing well were fast food, which has cheese on every burger, and or pizza. And people's home consumption of cheese went up.


Cheese is the number vector for cost of goods when you're in the pizza business. There's a website called cheesereporter.com. And we follow that to get an idea of what the prices are going to be like, you know, three, four or five weeks from now. And what we saw in May, the price has just started going through the roof, and I immediately told my investors, ‘Hey, this is going to ostensibly eradicate our margins,’ which it did. To put it into perspective, we buy 15-pound boxes and we go through about 60 of those a week. Pre-pandemic, they were about $33 a box. About a month and a half ago, they had gotten as high as $50. So yeah, I mean, it's nearly double the price. It was a big, big bummer. And even though sales were good, profits were not because we had that issue. So we didn't make any money this summer because the price of our number one ingredient skyrocketed. It's come back down, so these last few weeks have been a lot better. I think we'll be able to post a profit maybe in December, and just go from there.


Because we're one of the fortunate that paid our bills and all that stuff, we did get a PPP loan, which was awesome. That was super helpful. The thing that's made us be able to stay in business is that the community embraced us because we were a local business. And we were a local business with history. So we had tons of people coming out of the woodwork saying, ‘Yes, we were new to your place, to Durkin's Pizza, but we knew you were local, we wanted to try your pizza instead of calling Domino's.’


We've dipped into the karma bank enough this year, you know, we're thankful to still be here and still have jobs and to be in pizza. We're thankful for it. Incredibly grateful. Our business model hasn't changed. The only thing that's been a bummer is that we didn't have dining until October 1. And even still now it's at a very minimal level because the room is small. But that's been an area where we're also so incredibly fortunate because we didn't have to retrain the consumer. Pizza is takeout food, it gets boxed up and carried out. So our model itself didn't change much, with the exception that we are almost exclusively takeout revenue now versus dine-in and takeout.


2020 is not a year to thrive, it’s just a year to survive. I'm aware of that and my investors are aware of that. We all have that mindset, ‘let's just get through this.’ Matter of fact, my projections all the way through Q2 of next year are to be dog paddling, you know, keeping our head above water, making sure we have jobs for everybody, hang in there and pay our rent.


2020 is not my favorite. Nobody's favorite, except maybe some stockbrokers. They are the only people who are having a spectacular year.” -- Michael Durkin, Durkin's Pizza #Texas