Papa John's is in the news once again, and this time the competition is actually thanking the pizza giant for its stance on Obamacare.
Earlier this week, John Schnatter, CEO of the Papa John's corporation, announced plans to raise the price of pizzas 10-14 cents, as well as cutting employee hours to avoid having to provide them healthcare under the Affordable Care Act.
In a conference call, Schnatter told investors:
“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza. If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests."
The announcement drew harsh criticism and the companies official Facebook page began seeing a flood of angry posts. Digital Journal reported that calls for a boycott of the company have also been organized.
Forbes compared the cost of Obamacare to the "2 Million Free Pizzas" giveaway Papa John's announced in September. The free pizza giveaway will cost the company $24 million to $32 million, while providing employees healthcare will cost $5 million to $8 million. The Forbes article also says the companies stock prices have fallen more than 4 percent since Schnatter's announcement.
As reported by Digital Journal, companies who inject politics into their business run the risk of alienating customers and opening the door for competitors. A local pizza restaurant in Wisconsin is thrilled with the Papa John's announcement.
Nick Martin, owner of four Ian's Pizzas in Wisconsin, has provided full heath care coverage to its 50 full-time employees for several years. He told the Huffington Post:
"This may level the playing field for us. If they have to pay for benefits, and that pushes their prices up closer to ours, it will justify what we’ve been paying for and what we’ve been fighting to do the past few years.”
Comments on Facebook and Twitter echo Martin's sentiments, with commenters saying they will now seek out local businesses and national companies who already provide health care to employees. Many also refer to the Forbes article and vow to "never buy Papa John's again".
Martin's advice to Schnatter:
“I’d tell Papa John's' CEO, ‘Welcome to the club. We've battled the whole way giving health insurance to employees ever since we could afford to do it 9 years ago, as a two-year-old business.”