'Why so many Pizza 2for1s?' blog discussion

Former_MSE_Lawrence

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Why so many Pizza 2for1s?" Blog.

Click reply to discuss below.

aris

I think you got it all right - pizza is cheap to make, and they do not want to de-value their products.

To be honest, i'd say pizza is very close to a "Rip Off" when bought from pizza restaurants - along with Pasta. I'll make an exception for the pizza's made by hand from an experienced pizzaiolo in a wood burning oven - that is just a delight and worth the cost (within reason).

clareybabble

Never thought of it like that! I can see what you mean though. Our local brand name pizza takeaway is far more expensive (and not as nice) than our local non brand name takeaway where the pizzas are delicious (and bigger)! They've been going for years even with cheaper prices.

smu95rp

Of course this is how nightclubs work.

Door price of £20 implies an upmarket experience (in a provincial town) but ubiquitous vouchers and text messages giving £5 entry means that very few actually pay the £20.

I suspect the £20 price only exists to keep the perception of quality. The fact that a few poor saps may actually pay it is just a bonus.

RabbitMad

the concorde thing is true. A survey asked the flyers to state what they think the ticket cost (and as most people flying concorde don't buy their own tickets) they put the cost as a lot more than we really paid so BA put up their prices to meet expectations.

I also know of a webbing photographer who kept getting "!!!!!" weddings (his words not mine) where it was straight from the church to the local pub and he found it difficult to get decent photos. then he upped his prices and all of a sudden he was getting weddings at country houses with lots of ground and found it easy to get good photos.

the_big_grog

As a chef proprietor of a small town coffee shop cafe I can absolutely agree with the analysis. Pizza is very cheap to produce, labour intensive preparation is done by suppliers, invariably even the salad is bought in ready prepared. Our nearest Pizza Hut is usually staffed by no more than 3 or 4 staff on a quiet evening so even staff costs are very low. From my perspective the snobbery factor is very obvious, people will travel 5 miles to go to "fastbucks" and are happy to get robbed for what they're having. I try to provide value for money food and drinks but i wonder if I'm in the wrong game sometimes! The president of starbucks said recently he thought his chain was recession proof, arrogance. My hope is that the current financial woes will make more people want to shop on their local high street.

nomoneytoday

IMHO a 2 for 1 means you sell double the pizzas, whereas with a half price deal you only get half the turnover. The marginal restaurant cost of making another pizza is going to be pence. After all the staff are already there.

The garlic bread, dough balls and coca-colas are a bonus

It's a cheap marketing tool

Norma_Desmond

We took advantage of a '2 for 1' pizza offer at Domino's when we visited friends recently - just as well, because if we'd paid full price we would have felt distinctly ripped-off.
I'd never tried this firm before as we don't have a branch anywhere near us (thank goodness!) and it makes us appreciate our local pizza/kebab house - giant 14" pizza with fresh toppings and home made base for only £7.50!

hander

Granted, pizzas are cheap to make and hence cheaper to discount but 2-for-1s on pizzas (for example) also happen as these offers prevent customers from buying one pizza to share - pizzas are often larger than anyone really needs - largely due to restaurants aiming to present value from ... um ... bread and melted cheese. If they made them half-price, profitability would be reduced further for restaurants.

ps I've never understood why people eat dough balls with pizza. Would you like some bread with your, er, bread, sir?
pps Tedious but ...I reckon the Concorde example (if it's true) is more an example of a Veblen Good than Giffen Good - it involves consumption to display wealth.

SueC_2

... but be warned about the price of 'extras'. I've recently fallen for the Pizza Express 2 for 1 offer. Made the mistake of ordering a glass of wine with mineral water to go with it - got stung almost £7 for the drink! Where's the bargain in that?????

harryhound

I don't think Martin quite understands what a Giffen good is.
It is an inferior good on which financially stressed people have to depend.
Giffen noticed the effect with potatoes in Ireland.
As the blight took hold the price of potatoes went up, but that meant no money left in the family budget for (say) meat so the Irish continued to try to eat MORE potatoes the more expensive they got.
Fortunately we don't have many totally desperate people in the UK, but the credit crunch may well cause a similar effect in some of the third world countries.

In the potato example it was actually the potato causing the problem. A similar effect can be seen as people down shift. Train to coach. Hotel to Travelinn etc but these are not the true Giffen effect, that would require a rice or corn shortage.