The year is 1999. You live in the Midwest. Your family needs a quick dinner, and the kids are protesting for pizza.
You find a coupon in the local newspaper for a special deal at your local Domino’s: $6.99 for a large one-topping carryout pizza.
The year is 2025. You still live in the Midwest, and you’re in the market for pizza again. On Dominos.com, you find a deal: $7.99 for a large one-topping carryout pizza.
The Hustle
Um…what? How have pizza prices barely budged in 26 years?
Elsewhere across the American casual dining landscape, prices have kept up with or surpassed inflation. A Big Mac Extra Value Meal costs nearly $11, compared to $4.59 in 1993. A crunchy taco at Taco Bell that went for 59 cents in 1990 is $1.79 today.
Since inflation ramped up in 2021, pizza chains like Pizza Hut and Domino’s have hiked prices — just not by as much as their fast-food peers. And their prices today are vastly lower than what they charged in the ‘90s, adjusted for inflation.
“The American consumer is not ready to pony up for pizza,” a longtime pizza industry executive who worked at Pizza Hut and Papa John’s told The Hustle. “They consider pizza to be the cheapest option to feed the family. And I don’t know how that...is ever going to change.”
Yet the low prices don’t necessarily hurt the restaurants. That is, as long as they produce enough pizza.
Home Alone and the $11.80 pizza
It was a re-watch of the 1990 film “Home Alone” that first got me interested in pizza prices.
In a famous scene, Macaulay Culkin’s character scares away a delivery driver by playing pre-recorded machine gun noises from a gangster movie. (“Keep the change, ya filthy animal.”) But it was the price of his meal that had my attention: $11.80 for a large cheese pizza. That struck me as a similar price to today.
So, off-and-on over the last couple of years, I’ve tracked historic pizza prices and talked to industry veterans to figure out whether pizza prices truly haven’t changed.
Classic New York slices from Joe’s Pizza. (Robert Nickelsberg/Getty Images)
When it comes to local pizza restaurants, my hypothesis didn’t hold up.
In 2023, the median price for a New York City slice was $3.24, according to journalist Liam Quigley. Judging by past prices — ~$1.75 for a typical slice in 2002 ($3.09 today) or 15 cents for a slice in the 1960s ($2.75 today) — New York pizza has roughly tracked with inflation.
Bacino’s, a longtime Chicago joint, sold large stuffed pepperoni pizzas for $12.50 in 1985 ($37.64 in today’s dollars) and now sells the same pizza for $29.25.
Where I live in Dallas, the most popular local chain, Campisi’s, charges $25.70 for a large supreme — almost exactly what it charged in 2005, adjusted for inflation.
Independent pizzerias typically aim for 10% margins and up to 15% in standout years, says John Arena, who founded Metro Pizza in Las Vegas. Post-pandemic, he says everyone in the industry saw margins slip as labor and food costs rose.
“We've never raised prices to increase our margins,” Arena says. “We've raised prices to stay in business.”
The calculation behind raising prices is far different at highly competitive chains like Domino’s and Pizza Hut, which depend on customers who have little brand loyalty and mostly choose whichever place has the best bargains.
From the 1970s to the 1990s, Pizza Hut raised the menu price of a large pepperoni pizza at a rate that roughly matched inflation, from $4.20 in 1973 to $13.49 in 1997. But the 1990s saw competition increase:
Pizza Hut, previously focused on dine-in, mounted a challenge against Domino’s by entering the delivery market.
Papa John’s went public and expanded.
Little Caesars grew by undercutting everyone else.
Fast casual chains like Panera and Chipotle introduced new food options for money-conscious consumers.
Classic New York slices from Joe’s Pizza. (Robert Nickelsberg/Getty Images)
When it comes to local pizza restaurants, my hypothesis didn’t hold up.
In 2023, the median price for a New York City slice was $3.24, according to journalist Liam Quigley. Judging by past prices — ~$1.75 for a typical slice in 2002 ($3.09 today) or 15 cents for a slice in the 1960s ($2.75 today) — New York pizza has roughly tracked with inflation.
Bacino’s, a longtime Chicago joint, sold large stuffed pepperoni pizzas for $12.50 in 1985 ($37.64 in today’s dollars) and now sells the same pizza for $29.25.
Where I live in Dallas, the most popular local chain, Campisi’s, charges $25.70 for a large supreme — almost exactly what it charged in 2005, adjusted for inflation.
Independent pizzerias typically aim for 10% margins and up to 15% in standout years, says John Arena, who founded Metro Pizza in Las Vegas. Post-pandemic, he says everyone in the industry saw margins slip as labor and food costs rose.
“We've never raised prices to increase our margins,” Arena says. “We've raised prices to stay in business.”
The calculation behind raising prices is far different at highly competitive chains like Domino’s and Pizza Hut, which depend on customers who have little brand loyalty and mostly choose whichever place has the best bargains.
From the 1970s to the 1990s, Pizza Hut raised the menu price of a large pepperoni pizza at a rate that roughly matched inflation, from $4.20 in 1973 to $13.49 in 1997. But the 1990s saw competition increase:
Pizza Hut, previously focused on dine-in, mounted a challenge against Domino’s by entering the delivery market.
Papa John’s went public and expanded.
Little Caesars grew by undercutting everyone else.
Fast casual chains like Panera and Chipotle introduced new food options for money-conscious consumers.
The Hustle
From the late 1990s through the Great Recession, the quick-service pizza industry entered a decade-long decline. Some analysts blamed the restaurants’ malaise on high prices and recommended getting back to value.
Domino’s and Pizza Hut took that advice:
A full-price large pepperoni pizza at Pizza Hut cost $15.98 in late February, compared to $13.49 in 1997. (Though its large pizza is now an inch narrower in diameter, so some shrinkflation is at play.)
A full-price large pepperoni pizza at Domino’s cost $15.99 as of late February. The same pizza cost $13.45 in 2003.
Most customers, however, never pay full price. And discounted pizzas are also close to 1990s prices: Pizza Hut offered two medium two-topping pizzas for $8.99 each in February. In 1995, a deal entailed buying one medium two-topping pizza for $8.99 and then paying $5 for a second.
Given the higher food costs and labor costs, how can these restaurants possibly stay profitable selling these cheap pizzas?
One answer is volume.
More pizzas = lower prices
Back in the 1990s, Pizza Hut tried an unprecedented sales promotion. A customer could purchase one pizza at full price — around $10-$13 — and receive up to four more medium pizzas for just $4-$5 each depending on the market.
The Hustle
At first, franchisees were skeptical. How could they essentially give away four pizzas? Yet, the promotion worked so well that Pizza Hut tried it more than once.
The food cost of a pizza back then was about $2-$4 depending on size and toppings. Labor costs stayed about the same, whether workers made one pizza or five pizzas.
“Once you got the full price for the first pizza you could very easily do another pizza with very little incremental labor,” says Brian Cole, an attorney who previously worked for Pizza Hut corporate and specializes in franchise law. “You could in effect sell it for its food cost and cover all your rent, labor, all that stuff from the first pizza and not have to worry about it with the second through fifth.”
In other words, they wanted to keep prices low enough to entice customers to order from their restaurant, even if that means practically giving a pizza away. Because the more pizzas you sell, the less expensive they are to make.
The more pizza that gets sold, the higher the margin. (Joe Raedle/Getty Images)
Last fall, Domino’s CEO Russell Weiner hinted at the need for this strategy during the company’s Q4 earnings call. Domino’s, he said, had to “lean into value” as competitors lowered their prices.
“If there's a little bit of a squeeze in store margin, well, the way to make that up is through volume,” he said. And to keep increasing volume, Weiner added, Domino’s depends on a higher marketing investment than its peers.
The volume-dependent strategy has also worked because of our ravenous appetite for pizza.
Americans now eat ~3B pizzas per year, up from ~1-1.4B in the 1980s. And ~20% of those pies are sold by Domino’s, which has roughly doubled its share of the market and increased its volume of pizza sales by more than 3x in the same timeframe.
The Hustle
But volume isn’t the only tool Domino’s uses to keep pizza prices low.
Another explanation is hidden fees, specifically for delivery. None of the major chains charged them until the early 2000s when, facing declining sales, Papa John’s, Pizza Hut, and Domino’s started charging between 50 cents and $1 for deliveries in a bid to stave off declining sales. Today, those fees are closer to $5.
Domino’s has also developed its own supply chain to diversify revenues, manufacturing ingredients like dough with efficient, labor-reducing technology and selling them to its franchisees, who get the ingredients at a low cost. Its net income margins at the corporate level in the late 1990s were around 3-6%; they’ve been closer to 11% the last few years.
Pizza Hut, meanwhile, has performed worse at the volume game, becoming less popular and less profitable since its ‘80s and ‘90s heyday. Its US store count has dropped from ~8.5k in 1999 to ~6.6k today, and those stores averaged~$1m in sales in 2023. In 1994, the average domestic store took in $640k, or ~$1.3m adjusted for inflation.
Company-owned stores, which make up a tiny fraction of Pizza Hut’s total stores, have seen restaurant margins slip from ~8% a decade ago to below 1% in recent years. The chain’s successful franchisees, says the former executive, strive for 15% margins but often get closer to 7-10%.
Compare that to 1990, when Pizza Hut and Domino’s restaurants could reportedly see pre-tax margins near 25%.
Still, Pizza Hut pushes on, trying to gain customers and improve margins the only way the fast food pizza industry knows how: with bargain basement prices.
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