Why Are We Buying Less Pizza?

The Wednesday before Thanksgiving is a big pizza night. However, we did not order as much as usual.

Let’s take a look.

Pizza Sales

On a typical Friday, a local pizza place near me sells 325 pizzas. Their online menu tells us that their “Champlain” pizza is the “winner of best pizza in Central NJ.” At $21.75, its price tops an approximate $17.00 national average but its basic pizza is $14.00. But more than the pizza, customers get “… two pies, wings, garlic knots and soda, all of the extras,..”

The Champlain Pizza:

Now though many just call for the pizza.

Similarly, Papa John’s reports a scaling down trend with customers switching from large to medium pizzas and fewer toppings. In addition, avoiding the delivery fee, diners do the pick-up.

Wondering why, Slice, an online pizzeria ordering platform, says it could be the vast array of restaurants we can call and lighter eating habits. One research firm cites competition from chicken strips and wraps. Others say the $30 bill is the reason. Comparing the current tab with memories of paying $25.99 for “two extra large pizzas, a two-liter soda and a side,” they–especially lower income households–order less.

Our Bottom Line: Supply and Demand

An economist would say we can understand the pizza place plight through traditional supply and demand. We just need to see the determinants that shift the curves.

On the supply side, higher production costs is the usual culprit. With pizza, we can cite the bump in pepperoni costs from $110 to $140 for a 25-pound box.

As for demand, substitutes are pulling down sales as well as the elevated prices on other goods that give us less to spend on pizza.

Together, we have shifts in demand and supply that bring quantity down while the impact on price is indeterminate. It all depends on the slope of the curves:

We should note that the smaller pizza sellers report minor declines, if any. It’s the big chains that really are suffering.

One solution could be the ultimate oxymoron: a GLP-friendly pizza (with a cauliflower crust) that one pizza chain is trying to develop.

My sources and more: Thanks to this NY Times article for inspiring and providing the facts for today’s post. Also, do take a look at the Big Think for the math of pizza buying. It turns out that we pay less per square inch when we buy the bigger pie.