Pizza Operators Aim To Minimize Price Hikes

Pizza operators say they will continue to cater to value-focused consumers by keeping price increases in line throughout 2012, according to a report from market research firm Mintel.

Pizza restaurants, which have performed relatively well throughout the downturn by emphasizing a strong value component, expect to raise prices by only a modest 2.9 percent this year, Mintel said.

"Menu innovation, thoughtful pricing and national promotions aimed at value have been driving sales in the past several years, and are expected to continue in the future," said Eric Giandelone, Mintel's foodservice director.

However, he said, "The competitive nature of the pizza industry keeps the leading companies on their toes."

For example, segment leader Pizza Hut recently unveiled its $10 Dinner Box, which includes one medium rectangular one-topping pizza, five breadsticks with marinara dipping sauce and 10 cinnamon sticks with icing.

To help retain their competitive edge, chains have kept their pizza prices relatively flat — raising them only 1 percent over the past three years, the research firm noted.

Nevertheless, the report continued, many pizza players have compensated by taking price on other items, such as vegetables, up 13 percent; desserts, up 12 percent; pasta, up 11 percent; and salad, up 10 percent, all for the same period.

Overall, pricing ranks as the second-most important factor in determining the choice of a pizza restaurant, according to Mintel respondents who have visited a pizza restaurant in the past month.

Mintel pointed out that price falls just behind convenient location and ahead of speed of service and pizza variety.

However, offering ready-made pizzas and/or a pizza buffet also may attract lower-income customers and those with children who are looking for an even more pronounced value experience, Mintel said.

The Mintel study also found that:

• 38 percent of customers preferred thin-crust pizza, while 10 percent liked pan-style and 19 percent favored thick crust.

• When it comes to favorite toppings, pepperoni ranked first at 67 percent, followed by mushrooms and sausage, 53 percent each; and onions, 41 percent.

Anchovies were popular with only 5 percent of pizza fans, the study said.

Fieldwork was conducted in August 2011 among a sample of 2,000 adults ages 18 and older with Internet access.

Contact Paul Frumkin at paul.frumkin@penton.com.