Pizza Segmentation

December 30, 2012

Have you noticed that pizza seems to be getting a lot more expensive?

I started ordering a large 4-topping pizza online from our neighborhood Pizza Nova the other day and the total was going to be somewhere around $37 after tax. Before delivery fee and tip. That's a lot to pay for a pizza: well north of the local shawarma place and pushing into sushi territory. What's up with that?

Thinking about it a little, the answer is clear. Everybody eats pizza. From the elementary school kids scarfing down a slice and Coke for lunch to the commercial real-estate broker who doesn't have time for a restaurant meal to families like ours. Pizza, at least in our culture, is a universal food.

But not everybody pays the same price for their pizza. In fact, if I was running a pizza conglomerate I would be thinking long and hard about how to charge each of my widely varying customers the maximum amount they're willing to bear to address their pizza needs. Tough to do when the pricing is publicly posted above the counter and on every second flyer in my mailbox, but evidently not impossible.

^{Source: pizzanova.ca}

A pepperoni slice and Coke is $3 at lunchtime. That takes care of the elementary school kids. A large pepperoni (pickup-only) is $10, but only if you dig up the special offer on the web site. That one is for the super-value conscious. And for me, $40 for a large 4-topping pizza. Because the actuarial masterminds at Pizza Nova have sorted me into a bucket for people that have a specific pizza vision and are either insensitive to the cost of actualizing that vision or too impatient to hunt down a better deal.

They're not wrong: I've been paying that much for pizza for years. But as of now, the $10 pepperoni is starting to look much more appetizing.