…The new prices, which roll out to two-thirds the U.S. this week, slice at least $3 off the price of all pies. Medium cheese pizzas that had on average cost of $11 will now be $8, while large cheese pizzas will be $4 cheaper at $10. Some cuts are bigger. For instance, large pizzas with three toppings had on average cost $19 at Pizza Hut, but will now go for $10.
The $8, $10, and $12 pizza prices will be a permanent shake up of Pizza Hut’s prices… price cuts potentially put sales at risk, but Pizza Hut hopes it can attract enough customers to soften the blow. “I think we’ll see that the traffic and overall volume will increase enough to offset the guest check total,” Fuller told Dow Jones Newswires.
I thought this was completely insane, but then I looked at my pricing and realized my 12" cheese it $8.09 and my 14" cheese is $9.99. So maybe not totally nutty, but still - that’s a huge amount of money to try and make up with volume (and all the headaches associated with turning big volume). I mean, $3 and $4 bucks seems like a lot to leave on the table every time you sell a pie. Especially if that is the price for a pizza with up to 3 toppings!
So, can you really slash your prices and add enough sales volume to generate the same profits?
Domino’s reported a 56% increase in second- quarter profits as U.S. same-store sales rose 8.8%.
Oh… wait, what? I call shenanigans!
Kris and I were just looking at wheat futures today and thinking, “well, if the cheese market inching upwards wasn’t enough already that should spell the end of this $10 insanity.” Apparently - as always - we were mistaken.
So, who’s ready to get skimpy with the big boys!?!
