Over the past decade, Saudi Arabia’s fast-food sector has witnessed one of the fiercest price wars in the history of modern retail—what could economically be described as a “bloody massacre” of profit margins.
Major pizza chains burned hundreds of millions of riyals in pursuit of market share through deep discounts and excessive expansion. How did a meal once considered a “mid-month luxury” become one of the cheapest consumer options? And how did a local competitor manage to force market giants to completely restructure their business models?

The Classical Era: Oligopoly and Premium Pricing
Saudi Arabia’s pizza market began taking shape during the economic boom of the early 1980s, specifically in 1983 with the opening of “Pizza House” in Riyadh.
Foreign investment followed through local agents. In 1987, businessman Awni Shaker introduced the Pizza Hut brand, with a strategic focus on the “family dining experience” (Dine-in).
In 1992, the Aljammaz business family acquired the rights to Domino’s Pizza, pioneering an opposing model based on delivery and takeaway efficiency (Delivery & Takeaway).

Despite this expansion, the market suffered from “pricing inefficiency.” Pizza was priced as a premium meal; in 2001, a large Pizza Hut pizza cost approximately 45 riyals—the equivalent of 67 riyals in today’s purchasing power.
This high pricing meant that pizza accounted for only 3% of the overall fast-food market, as Saudi consumers turned to cheaper alternatives such as Levantine bakery pastries.
This continued until early 2010, when Domino’s began introducing promotional offers, such as its Monday deal, and launched the first online ordering platform in 2012, taking the top spot in the market.

Identifying the Market Gap: The Birth of “Maestro Pizza”
In the world of consumer economics, unjustified prices create a market gap waiting to be filled.
Khalid Alomran, a finance graduate of King Fahd University of Petroleum and Minerals and a former McKinsey consultant, recognized this signal.
Alomran began with a simple investment thesis: “The Kingdom’s pizza market suffers from unjustified price inflation that limits total demand.”

To solve this problem, Alomran pursued an approach based on deep operational efficiency.
He traveled to Spain to learn from Leopoldo Fernández Pujals, founder of the giant European chain Telepizza, then returned to Riyadh and acquired a small restaurant, Pizza 44, which he used as a “business laboratory” to test price elasticity and fine-tune operations (A/B Testing for Pricing and Menu).

Supply Chain Innovation
To sustainably break prices without incurring losses, Alomran realized that change had to begin with the “cost structure.” Drawing on his family’s experience founding Luzine bakeries (Western Bakeries—1995), he created Maestro Pizza in 2013 with a revolutionary business model in the Saudi market based on:

  1. Centralized production:
    Creating a central kitchen and factory to prepare dough and ingredients.
  2. Branches as assembly points:
    Restaurants were transformed into mere final points for “assembling and baking” pizzas, reducing branch space, cutting waste, and lowering the cost of skilled labor.

This lean operating model enabled Maestro to offer clear and simple penetration pricing: 10, 20, and 30 riyals per pizza. This pricing created a shock in the price elasticity of demand, triggering a massive influx of consumers and driving the company to expand rapidly to 70 branches by 2015.

The Attrition War: 2015–2017
The dominant players, particularly Domino’s, did not stand idly by. The first spark of the war came when Domino’s introduced temporary discounts on takeaway orders, followed by a marketing war on Twitter characterized by attacks on supply-chain quality—frozen dough versus imported dough.

But the real and costly war erupted on the ground in September 2017. Domino’s adopted a predatory pricing strategy aimed at driving the new competitor out of the market through an offer: “Buy a pizza for 30, and get the second for 10 riyals.” Maestro responded by reducing the price of the second pizza to 5 riyals. Domino’s countered by reducing it to one riyal. At that point, Maestro was forced to use the nuclear option: “The second pizza free.”

The Economic and Operational Effects of the Price War
This price-burning strategy led to inevitable outcomes in business economics:

  1. Margin Compression:
    Selling the product at or below marginal cost led to eroding profits.
  2. Supply Chain Bottlenecks:
    The huge surge in demand forced Maestro to inject emergency capital expenditures (CAPEX) totaling 90 million riyals to build a new factory.
  3. Quality Degradation:
    The focus on meeting the enormous volume of orders led to declining key performance indicators (KPIs) related to quality, delivery speed, and order accuracy.

Who Ultimately Won?
Just as in oil price wars, Saudi Arabia’s pizza war ended in an irreversible structural shift. The pace of the war gradually subsided with the emergence of the COVID-19 pandemic, but the market never returned to its old equilibrium.

This competitive dynamic established a new price benchmark, forcing less efficient players out of the market. Ultimately, the biggest winner and final beneficiary was the “Saudi consumer” (Consumer Surplus), who began receiving nutritional value and calories at a cost that fell from 70 riyals to 15 riyals per pizza. Thanks to operational efficiency and fierce competition, pizza was transformed from an occasional meal into an inexpensive everyday fast-food staple.