DIP DUNK DRIZZLE

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Neapolitan and East Coast pizzas, calzones and pasta dishes to burgers, pork chops, pot roast and chicken.

“Panino’s is a scratch kitchen, family-owned, with 20, 30, 40 different items on the menu, and that’s very hard to maintain,” he notes. “To make our menu is very complex. You can’t have a minimum-wage employee making those dishes. You need a committed, full-time person who will learn that job and stay with you. I can’t have a part-time high-school kid making these dishes—it’s not gonna happen.”

Only The Strong Will Survive

In other words, even after declaring his independence from third-party companies, Rago still has a lot to figure out. The pizzeria industry, he believes, is undergoing “a major shift.” The full-service model might not be the model of the future for operations like Panino’s, even though taking good care of his customers and filling their bellies with a wide range of amazing foods is Rago’s passion.

So what’s the solution? Clearly, delivery is the big moneymaker for the major chains, while some smaller chains are also investing in the ghost kitchen model to cut back their expenses and raise their profits. Even some independent operators, such as past PMQ cover subject Michael Androw, owner of E&D Pizza in Avon, Connecticut, have switched to

DELCO only and seen their sales soar during the pandemic.

“I might just have to do that,” Rago says, with a sigh. “But I’ve got a good lunch business. I’m very undecided about it.”

Time will tell whether the shift in customer preferences for delivery and carryout is permanent, but it’s looking that way to Rago. And with rising food prices and labor costs, the advantage goes to Domino’s, Pizza Hut and other big chains. Sadly, raising his own prices is not a promising option. Customers still expect a certain price point for pizza, and that price point is disturbingly low. “When I was a kid, a 16” sausage pizza cost $9.50,” he reflects. “Now it’s $22. In the past 25 or 30 years, you’d think that would have tripled, but it’s barely doubled. That pizza should sell for $30—it feeds four to five people!

“So what does that tell you?” he continues. “These chains have hurt the independents with low prices, so we [independents] have to charge low prices, too, and keep our profit margins really low.”

Rago will keep pondering the problem, but he knows he made the right move by cutting out his old third-party partners back in 2020. “It’s a very challenging world we’re living in right now,” he says. “That’s why you need to declare your independence from these third-party companies to try to retain all the profits you can. We’re working on very low margins with rising food costs, and we can’t continue to raise our prices to keep up. Only the strong are gonna survive.”