JUANA SUMMERS, HOST:
There's a classic scene in the movie "Home Alone" where the child left alone, at home, orders a pizza for delivery.
(SOUNDBITE OF FILM, "HOME ALONE")
RALPH FOODY: (As Johnny) How much do I owe you?
DAN CHARLES ZUKOSKI: (As pizza boy) That'll be 11.80, sir.
SUMMERS: He handles the transaction by playing clips from a mobster movie he's got cued up on the VCR.
(SOUNDBITE OF FILM, "HOME ALONE")
FOODY: (As Johnny) Keep the change, you filthy animal.
SUMMERS: And once he gets the delivery guy to flee, young Kevin McCallister - well, he's living the dream.
(SOUNDBITE OF FILM, "HOME ALONE")
MACAULAY CULKIN: (As Kevin McCallister) A lovely cheese pizza just for me.
SUMMERS: Now, for some of you, that'll be a bit of nostalgia back to the year 1990. For journalist Mark Dent, his reaction was that somehow, 35 years later, 11.80 still sounds like a reasonable price for a pizza from an American mega chain. He's investigated in a story headlined "Is Domino's Pizza Inflation-Proof?" Mark Dent, welcome to the program.
MARK DENT: Yeah. Thanks for having me, Juana.
SUMMERS: For starters, I'll just note that your story specifically looks up Domino's and Pizza Hut prices. How do today's prices compare to those 20 or 30 years ago?
DENT: Believe it or not, Domino's and Pizza Hut, at least, the pizza prices are almost exactly the same. The menu price for, like, a Domino's large pepperoni, it's something like $16 these days, and that's also true at Pizza Hut. If you go back to the late '90s and early 2000s, they were around between 13 to $14. So you're talking an increase of maybe 20%, when inflation has gone up something like 90% or so since then. And I found coupons from 1999 at Domino's offering a 6.99 large, one-topping pizza. There was a huge coupon last month at Domino's where you could get a large, one-topping pizza for 7.99.
SUMMERS: Interesting. So I'm curious - I mean, we're talking about these two kind of big household-name chains, but what about when we talk about - I don't know - my independent local pizzeria or even just, like, other fast food options?
DENT: The Pizza Hut and Domino's lack of inflation is basically unique. Where I live, in Dallas, there's this local chain called Campisi's, where you get - it's about $25 for a large supreme pizza. If you go back 20 years ago, it was something like 15, so it's pretty close to inflation there. And that's the same with, like, Taco Bell and McDonald's. Big Mac value meals are about $11 now. They were closer to $5 in the '90s. So it's really just these pizza chains that are avoiding inflation.
SUMMERS: In your research, you found that volume is a major factor in why prices stayed relatively low. Explain what you found.
DENT: So the labor required to make one pizza was basically the same as it was to make five. So there was only ingredient cost on these extra pizzas. The margin just goes way up when - the more pizza that you make. And Domino's has just perfected this. Now they sell about 20% of all pizza that's consumed in the U.S. And Americans are eating roughly twice as much pizza these years as they did in, like, the late '80s, for instance, and it has allowed them to keep prices low because they play the volume game so well.
SUMMERS: Now, there's another modern affliction that we've heard a lot about in recent years, and that's hidden fees. And those are also higher now than they were in the '90s, right?
DENT: Absolutely. Starting in the early 2000s, that's when Papa Johns, Pizza Hut and Domino's, they started charging between 50 cents and $1 for delivery fees. Now, if you order from Domino's or Pizza Hut, it's $5.
SUMMERS: I do kind of wonder, did the free market have a hand here? I mean, we just have a whole lot more pizza options than we did back then as well as, I mean, other fast food options. Is it the fact that just increased competition helped keep prices low?
DENT: I think that's a huge part of it. And when you go back, you know, 25, 30 years ago - I grew up in the Midwest, in Kansas City - like, our options were Pizza Hut, Domino's or, like, Little Caesars maybe. But now, like, there in Kansas City, there's all kinds of local places that are higher-quality pizza. And the only way for Domino's and Pizza Hut to compete with them and then against each other is by having lower prices. They just keep trying to go lower and lower.
SUMMERS: That's Mark Dent of The Hustle. Mark, thank you.
DENT: Yes, thank you so much. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR鈥檚 programming is the audio record.
