'Pizza Index' Suggests Aussies Are Skint... Or Just Tight

Pizza Index is a new measuring tool from stockbroking firm CMC Markets that attempts to predict shifts in the economy based on Australia's pizza buying habits. The idea is that consumers move away from expensive foods when times are tough in favour of the budget end of the market -- namely, cheap takeaway pizza. As the Index shows, the current trend for bottom-of-the-barrel $5 pizzas paints a grim picture for the economy. Or maybe we're just a bunch of tightarses?

The Pizza index follows the same principle as the Lipstick Index; an economic model that analyses shifts from big ticket purchases to small luxuries like lipstick to predict consumer spending confidence. Similarly, the Pizza version tracks consumers' shift towards the "value" end of the takeaway pizza spectrum. Or as CMC Markets explains: "pizza sales up could equal consumer activity down."

See also: Are $4.95 Pizzas A Viable Business Model?

Domino’s Pizza reported its full year numbers today with net profit up 50% to $45.8 million for the 12 months to June 30. As CMC Markets notes, much of this recent sales growth was off the back of a "Cheaper Everyday" promotion that has seen Domino's pickup prices slashed to just $4.95 per pizza. Pizza Hut has also introduced pickup $4.95 prices, with all pizzas capped at just $8.50.

On the surface, the Pizza Index appears to present a warning sign about weakening consumer activity. However, there's also the fact that Aussies love a bargain and don't seem particularly fussy when it comes to fast food.

"Let’s be clear, [these figures] are not spelling out a market disaster," CMC Markets admitted on its blog. "Taking a balanced view, data today also showed rising business confidence and better than expected lift in house prices in Q2." [Via Business Insider]


Comments

    Not tight, just a keen eye for the value for money, net benefit of consumption calculation. Pizzas are uniformily rubbish, so why pay up big; I'd prefer to keep my real money for a nice pair of Crockett and Jones shoes.

      'Pizzas are uniformly rubbish'

      Guess you haven't tried any real pizza then. Here in Melbourne they just keep on comin - 400 Gradi, Supermaxi, DOC, I Carusi, Pizza Ibera, the list goes on, all amazing, and worth every penny of the $20 you pay for them.

      These days I order my pizza from an actual Italian restaurant. I've given up on the major chains. The recent race to the bottom has only made the previously abysmal quality even worse.

      stop buying pizza from big chains and instead by from an indie pizza shop, yes its more expensive than the big chains but the pizzas are actually worth it

        True, and they usually taste better too. Why spend $15 on a pizza that tastes like an old shoe smothered in BBQ, when you can spend $19 and get a decent pizza. Or if you don't mind the extra effort, spend $8 at woolies and make your own pizza with whatever you like.

    The takeaway and delivery market is flooded with competition. Why would I buy 2 cold pizzas that are completely different from what I ordered (dominos, 3 orders on 3 occasions wrong everytime. I don't know if pizza huts ones were wrong, so little topping hard to tell what it was meant to be. when for the same price I can get a mixed entree naan bread and a main for the Indian place that's down the road from pizza hut. Or the wood fire pizza place, Or the many other option available.

      I'm latching here despite seeing similar points in a few other comments and because I think you make a good point about the competition.

      My first job was at a Dominos and we actually made pretty good pizza. It's largely effort in the dough and how well stock is rotated and ordered, it generally won't match a really good gourmet place on taste alone but for value for money it was great.

      I ended up loaned out to a few stores during my time there, and it was awful. A lack of care meant almost everything in the store was awful... (Largely due to the dough) It was so bad that I actually asked the manager how they managed to get any repeat customers when they were selling such awful crap.

      Her answer?

      "The Pizza Hut down the road is just as bad."

      The main thing I took away from this experience was how much variation you'd see in franchise stores, and depending on the area you live you might just get boned. Depending where you are you might only have one decent place in range, or they might all be crap... I always assume that will have a greater effect on people's choices.

      However there's also a large population who consider it as a cheap option and due to laziness will default to one of the major chains out of comfort.

        I did my time both at pizza hut and dominos and I agree it's a franchise thing, the dominos I worked at you couldn't fault them, they won a lot of in house awards. The pizza hut I'll say average.

    Pizza Hut/Dominos/similar stores are only painting this bleak pricing picture because consumers, in my opinion, have woken up to how horrible those plastic pieces of crap supplied by those companies actually are. We're instead forking out the little bit extra for good pizzas from either our local friendly independent shop or from Crust

      Yep. We get pizza most fridays. We pay about 6x what we would if we went to dominos, but we don't feel sick afterwards.

    I love a cheap Pizza but Pizza Huts Mia range seemed not much better than your typical frozen kind. Best value pizza I've had recently was the 18" pizzas from the Costco takeaway. $15. Reminded me of what Pizza Hut used to be like in the 80s. I miss a good deep dish pizza.

      Oh gosh yes, +1 on the Costco pizzas. We grabbed a couple of the pre-made ones from Costco's deli the other day and cooked them on pizza stones, they were fantastic. Well topped with what tasted like really good quality ingredients (e.g. good kalamata olives instead of those nasty sliced black olives that the big chains use), tasty base that wasn't doughy, and damn those things are huge. Fantastic value.

    I'd rather buy one $17-$20 wood fired pizza that can easily fill up two people, than two flavourless chewy domino's, pizza hut or pizza capers jobs which fill one person up each.

    I love my local Pizza Hut, my Dad and I have pizza every Saturday night no matter what the price is. The local Pizza Hut is literally only a few corners away and they don't skimp on the toppings, I have noticed though that Pizza Hut's online ordering menu keeps getting smaller and smaller with less variety. Dominoes on the other hand has a much bigger variety of menu choices orderable online but my local store's attempts at pizza making pale in comparison to even cheap frozen store bought pizzas, not exaggerating here.

    Pizza hut a Dominoes aren't real Pizza places, I hate to be "that guy" but they aren't. They're themed shitty fast food crap joints who try and make things imitating pizzas.

    So maybe people are just getting better taste? Buying real pizzas or just moving on to other better alternative fast food sources.

      Agreed. Just like McDonalds & Hungry Jacks are imitating what a real burger is.

      Saying that my local dominoes actually got better when the owners changed, but still they aren't what i'd want on a regular basis. But I guess i'm a bit spoilt for pizza with home made pizza dough and all.

    how does lowering the price of pizzas correlate with aussies being tight arses?

      The article mentions the preference for cheap pizza. It's the cheap pizza that is an indicator. In a strong market, people would pay extra for a better pizza.
      There are many indicators that confidence is not good - look at gambling (eg. Dividends for a trifecta are less than 1/10th of a decade ago). These trends represent how much people are willing to pay/risk for their return.
      Thanks for the article Chris. Food for thought.

    Aussies just don't like being ripped off. My experience with Dominos has been that no matter how much more you spend, you always get the same light dusting of toppings. If I spend more money, I want more than just flour.

    The Pizza's from the main stores (Pizza hut, dominos, eagles boys etc) are terrible
    https://www.crust.com.au
    herospizza.com.au
    and https://plus.google.com/101171738789947355205/about?gl=au&hl=en
    Are amazing and are worth the extra $$

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