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Pizza Wars The Fast-Food Chains That Sat Out Inflation
In the 1990 film “Home Alone,” child star Macauley Culkin orders a pizza for delivery to his house while he battles two dim-witted wannabe burglars. The price he paid: $11.80. Today, the price of a pizza for delivery is about the same. Pizza lovers at many locations can order a large one-topping pizza for $7.99 from Domino’s and $9.99 from Pizza Hut, plus a delivery fee.
sales volume, their per-pizza cost declined. Selling one pizza at full price enabled the chains to cut prices on additional pies, because labor costs for one versus several pies are about the same, Dent found. Also, Domino’s has built its own low-cost supply chain. This enables its stores to “lean into value” as a marketing strategy and put up with thinner margins, Domino’s CEO said on a Q4 2024 earnings call. Although margins for both chains have plummeted, Pizza Hut has taken the bigger hit since its peak in the “Home Alone” era. Its store count and same-store sales have plunged in recent years. Domino’s now sells about 20% of the pizza consumed in the United States, compared with Pizza Hut’s 12%. Nevertheless, the price wars have helped turn the U.S. into a nation of pizza eaters, with annual consumption rising to 8.8 pizzas per person from 5.6 in 1988, Dent reports. The biggest winners? The independent and regional pizza restaurants that now capture nearly half of the U.S. pizza market.
What happened to inflation?
The nation’s two biggest pizza chains basically sat it out. In a 30-year period when the price of a Taco Bell taco and a Big Mac have each risen more than 200%, a one-topping pizza is up only 14% at Domino’s and 18% at Pizza Hut, according to research by journalist Mark Dent of The Hustle. While Domino’s touts its $9.99 “Dream Pizza Deal” as the best ever, Pizza Hut fires back: “No One OutPizzas the Hut!” How do they do it? “By paring down costs, adding fees, and putting up with slimmer margins in a prolonged slugfest for higher volume,” Dent says.
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While both chains delivered pizza for free decades ago, they now charge about $5 per delivery. Also, as the chains increased
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