Probably not as bad as many people would think. There are usually huge markups on retail food. >100% is commonplace. I've seen as high as 400% on food, i.e. the business sold the food item for 5 times what it cost them to buy. Some of the markup is for the costs of running the place of course, but it's not implausible that a fast food business would sell something at a far lower markup to attract customers. Maybe even at a loss if they really had to. There's a lot of competition, even if there isn't a direct competitor in the immediate vicinity. A customer can usually order from dozens of fast food outlets just as easily. There usually isn't even an extra delivery charge for under 3 miles, so that's potentially all the fast food outlets within an area of about 28 square miles. Easily dozens in an urban area. Then there's indirect competition from other convenience food. Fast food outlets aren't fine dining, so microwaveable food is more competition. Some of the supermarket frozen takeaway style ready meal stuff is on a par with most takeaway stuff of the same type.
Since the business in question only sells pizza at half their usual price on monday to thursday, I'm strongly inclined to think it's normal pizza being sold at a far lower markup. Mon-Thu is probably the quietest time for the business, especially for passing trade. It wouldn't be a bad idea as a way to increase sales volume. If enough people get a decent pizza for £3.50 instead of £7, some of them will end up buying pizzas from that place at £7 because some day they'll want a pizza on a friday, saturday or sunday and they know those pizzas are decent and they have some liking for the business because of the £3.50 pizzas. Also, people often buy other things with a pizza. A drink, for example, which usually sells at a spectacular markup. Better to sell one item at no profit and one item at a large profit margin than to sell no items.