Pizza price wars - round II
| 2 Bros Pizza: $6.00 per pie
|| Bombay Fast Food/6 Ave. Pizza: $5.99
A few weeks ago, we highlighted a pizza price war (Pizza price war hits Manhattan) that was in full swing here in Manhattan. The battle was first highlighted in a New York Times article written by N.L. Kleinfield where various 'pizza-by-the-slice' purveyors located on Sixth Avenue between 37th and 39th Streets were engaged in a downward spiral when it came to pricing pizza by the slice. Here’s what the author had to say then:
On Thursday evening a week ago [late March], Bombay Fast Food/6 Ave. Pizza — unprovoked, and without warning — cut its pizza price to 79 cents. The next morning, 2 Bros. retaliated by moving to 75 cents (its owners felt it was easier to make change from a dollar than at 79 cents). Bombay/6 Ave. matched the 75 cents, and that’s where everything sits.
“We don’t sell pizza at 75 cents,” Eli Halali [owner of 2 Bros. Pizza] said. “But if they think they’re going to sit next to us and sell at 75 cents, they’ve got another think coming.”
For his part, Eli Halali made it clear that 75 cents was a temporary price point. He said he could not make money at that level and eventually would return to $1. He said that if Bombay/6 Ave. Pizza went back to $1, he would as well.
If it didn’t, he said, it better watch out.
I've been getting a front row seat in all of this since I walk past the battling pizzerias each morning and evening when working in Manhattan. Bombay Fast Food/6 Ave. Pizza and 2 Bros. Pizza are both located on the same block – in fact, their storefronts are separated only by a small entrance to a upper floor barbershop; less than eight feet between the two.
While pizza by the slice seems to stabilized at 75 cents, they’ve now opened a new front in their ongoing war. This time, the price war is centered on the price of an 18” large pizza. In the two weeks since first highlighting this war, the price of a large pizza has now declined to $5.99. It’s been like watching a train wreck – price reduction after price reduction with each following the other. Things seem to have stabilized at the $6.00 price point – if you look at the photos taken earlier in the week, you’ll see that 2 Bros. Pizza has been slashing prices so fast that their signage can’t even keep up. Rival Bombay Fast Food/6 Ave. Pizza is actually selling pizzas today for $5.99 – undercutting their competition by only a penny but gaining significant behavioral economic advantages by selling their pie with a ‘5 handle’ along with the 99 cent add-on.
I’m temped to jump into the mess; get both owners together and just yell, “Stop it!” But as each day goes by, I’ve become more and more curious as to the where the next shot will be aimed. Will the front switch back to pizza by the slice? If so, whom do you think will make the first move down to 50 cents per slice?
I’ll keep you informed…
Here’s the takeaway: We’ve said it before, but it bears repeating again…Price wars are a fool’s game!