PHOENIX (AP) -- The pizza business can't get a break these days. The cost of dough and cheese is at an all-time high. The average price of gasoline continues to hover above $4, frustrating both customers and delivery drivers.

"It's the perfect storm for the restaurant industry," said Steve Chucri, president and chief executive officer for the Arizona Restaurant and Hospitality Association.

"Wheat, cheese and everything that goes into a pizza is up. The ingredients to what we have always taken for granted as an affordable meal are way up. How do you deal with that?"

Arizona pizzerias are trying to turn a profit on ever-tighter margins.

Julian Wright held a grand opening Thursday for his new La Bocca Urban Pizzeria and Wine Bar in Tempe.

"The project was started a year and a half ago, when no one predicted what would happen to the economy," he said.

During a soft opening this spring, La Bocca began to find one of its niches: customers who live in nearby downtown Tempe condos and walk over.

In addition, the restaurant promotes the fact that its pizzas, sandwiches and salads are made from locally grown and organic ingredients. Some of those ingredients cost less than non-local food because they do not have to be trucked into town.

Wright expects to be busy.

"The good news is we are very reasonably priced compared to say, steak," he said. "It's easier to get people in for an $11 meal than a $25 meal."

The first Red Devil Italian Restaurant and Pizzeria opened in Phoenix nearly 50 years ago.

That's given the Digeno family plenty of time to develop relationships with flour and cheese suppliers.

They warned current co-owner Joe Digeno Jr. that the cost of food was about to skyrocket, so Digeno said he had time to prepare for the change.

Red Devil's management raised prices on various menu items by $1 or less earlier this year. Prices remain competitive because management "keeps an eye on the competition," Digeno said.

A small cheese pizza at Red Devil costs about 50 cents less than one at Papa John's.

Digeno said he never considered changing recipes or cutting portion sizes.

"We would never mess with the cheese," he said. "We have been using the same products for years and that is what people expect when they come here."

Five years ago, Dennis Daniel paid $9.50 for a 50-pound bag of flour.

Today, that same bag costs $31.50.

"The economy has everyone in fear," said the managing partner for Picazzo's Gourmet Pizza & Salads, a Sedona chain. "No one knows where the bottom is going to be."

Daniel's staff has learned to be precise about measurements to avoid waste.

Business at the Sedona and Scottsdale stores has remained steady, while it's fallen in other locations, Daniel said.

But the company still plans to expand its Tempe restaurant by 1,000 square feet and open a franchise in Gilbert later this year.

Picazzo's revenue is helped because it caters to customers who are on gluten-free diets. That comprises about 20 percent of the company's sales and is expected to be a growth area, Daniel said.

"It's a whole new market out there," he said. "If one person is gluten intolerant, I pick up the whole family."

Publicly held national restaurants like Papa John's and Domino's, under pressure from Wall Street and customers, are using other strategies to keep costs down and income up.

"I think the trend toward extra-thin crust is helping a bit on the flour-utilization side," said Robert Goldin, vice president of Technomic Consultants, a research firm in Chicago.

Goldin said chains are also promoting products such as chicken wings and starting to use "pizza cheese," which is less expensive than mozzarella.

Chucri said he knows of no Arizona pizzerias that have gone out of business because of recent increases in the cost of ingredients. But some are cutting back elsewhere, he said.

"Some are laying off managers," he said. "And some owners are just getting out there and wiping off the tables themselves."

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Information from: The Arizona Republic, http://www.azcentral.com

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