Prices fall as tensions rise in Aussie pizza price war

Jan. 18, 2004

WENDOUREE, Australia--The pizza war here is heating up as operators slash prices to match their competition.

According to The Ballarat Courier, a Pizza Hut celebrated its official grand opening on Jan. 17 by selling pizzas for AUS $3.95 (U.S. $3.03) from 11 a.m. to 5 p.m.

Customers loved the special, but the local competition didn't.

Domino's Pizza franchisee Brett Parsons accused the Pizza Hut of luring customers away from his store's grand opening promotion that same day. Domino's pizzas sold for AUS $4.40 (U.S. $3.37) between 11 a.m. and 4 p.m.

"It probably took the cream off it (the promotion)," Parsons said. "It was just a very catty, underhanded sort of thing to do."

But Pizza Hut Victoria general manager Kurt Whitlow dismissed the incident as healthy competition.

"I guess that's the nature of the business," he said. "... it wasn't a case of deliberately doing it."

Still, the Domino's staff stayed busy by selling more than 1,000 pizzas that day.

Two doors down, local independent Don Ciccio's Pizza and Pasta has battled the arrival of the two international pizza chains for the past month. Owner Tony Rizzo introduced a seven-day AUS $5 (U.S. $3.83) pizza special to counter Domino's AUS $4.95 (U.S. $3.80) lunch offer. He said the competition and subsequent publicity not only doubled his business, he had to hire three extra employees and the "fastest pizza oven in the world" to satisfy demand.

"I've never seen anything like this; it's just phenomenal," Rizzo said. "I've been coping very well. It's been incredibly busy and it hasn't dropped off ... until now anyway. Who knows what the future holds?"

See related stories ...
* Pizza price war slices profits in Australia
* Domino's Pizza to open first Victoria, Australia store

Topics: Domino's Pizza , Marketing , Operations Management , Pizza Hut

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