Little Caesar is the fastest-growing pizza chain in America. The franchise is famous among low and middle-income earners for its cheap pizzas.
The company registered sales of up to 3.2 billion dollars. Little Caesar has over 5000 locations all over the United States.
Little Caesar’s business model focuses on offering quick and affordable pizzas. This allows them to tap into a vast market of fast food consumers.
The pizza business is characterized by stiff competition. However, little Caesar continues to maintain its top spot while providing cheap pizzas.
So why is Little Caesar pizza so cheap?
Little Caesar’s takes advantage of its unique market position to produce cheap pizzas. The franchise utilizes low-cost strategies in making its products.
The company uses small restaurant spaces to reduce rental costs. They also make their sauce and dough to save on money. Their pizzas also have carefully proportioned toppings. This reduces the cost of ingredients.
How Does Little Caesar Cut Its Costs?
Little Caesar uses various strategies to produce cheap pizzas sustainably. These strategies are well-drafted to have a minimum effect on their product’s quality. So what are some of these strategies?
1. Operating carry out only restaurants
Little Caesar pizza restaurants only service takeaway orders. This helps the company to save a lot of money.
Also, since there is no dining, the restaurant doesn’t have to invest in furniture and other equipment.
The small size of their buildings also reduces their rental expenses. This allows them to expand their operations by opening several stores.
Operating as a carry out-only restaurant also reduces their staffing needs. All customers can be served through a counter by a single person.
A small number of employees translates to less salary paid out. Most customers prefer to carry out restaurants as it saves them time.
All they have to do is walk in, place an order and walk out with their pizza! Little Caesar takes advantage of all these benefits to produce cheap pizzas.
2. Tweaking ingredients
Little Caesar has managed to substitute some of the ingredients used in pizza. Cheese is known to be the most expensive ingredient. Little Caesar uses mozzarella cheese instead of ordinary cheese.
Mozzarella cheese is extracted from natural milk. This kind of cheese has several advantages over ordinary cheese.
Mozzarella cheese keeps for as long as it has little water content. This property allows it to be stored for a long time without going bad. This lowers the cost incurred by the company in keeping its products fresh.
Mozzarella cheese is also a natural product without any flavors. This makes it a suitable ingredient for both vegetarian and non-vegetarian pizzas.
By using mozzarella cheese, little Caesar dramatically reduces the cost of making pizzas. This allows them to sell their pizzas at a low price.
3. Making their inputs in-house
Little Caesar also reduces their costs by making their inputs in-house. For example, the company prepares its sauce and dough in-house to save on money. Acquiring the two in a ready-to-use state is convenient but not always cheap.
Making their dough in-house also ensures that their products are always fresh, making their pizza tastier. In addition, the franchise features vegan crusts and sauce as regulars.
Their sauce is also known to be concentrated that it requires diluting. Selecting their ingredients allows them to customize their sauce flavor. This allows little Caesar to produce cheap pizzas without compromising on quality.
4. Cutting delivery costs
Most fast-food restaurants are now focusing on making home deliveries. This is a great selling model as it offers customers a lot of conveniences.
In addition, the model works for customers with busy schedules or those who live far from the restaurants.
However, making deliveries also increases costs. This is often the case when customers are close to the restaurant. This forces the seller to offer free delivery to stay on top of the competition.
Little Caesar encourages their customers to come and shop in their stores. This allows them to gather insightful feedback from their customers. It also helps the company reduce costs by saving on delivery.
The company’s decision to let customers into their stores also helps them upsell other products. For example, even though it’s known for pizzas, little Caesar also has other snacks on its menu. Proceeds from the sale of these snacks help boost their revenues.
The franchise ensures it’s accessible to its customers by constantly expanding to meet their demand. This is the reason why it has over 5000 restaurants spread across each state in America.
By allowing customers to shop in their stores, little Caesar increases its revenue while reducing its costs. In addition, this enables them to produce cheap pizzas.
5. Perfect toppings proportions
Little Caesar has adopted a uniform way of apportioning their toppings. This allows them to reduce the number of toppings they use on each slice of pizza.
Cheese and meat contribute to the highest cost of making pizzas. However, little Caesar reduces these costs by using less meat in their pizza. They also use mozzarella cheese together with their in-house sauce.
The use of less meat and mozzarella cheese makes their products an ideal pick for vegetarians.
The franchise has also partnered with suppliers who offer them discounted rates. Combining their apportioning and cheap ingredients lowers the cost of producing pizzas.
Who Owns Little Caesar Pizza?
Little Caesar was founded in 1959 by Mike IL itch and his wife, Marion. Mike was a professional baseball player who got injured four years into his career.
The couple used their 10,000 dollars savings to start a restaurant. The first restaurant was located in Detroit, Michigan.
Mike wanted to call the business pizza treat, while Marion preferred naming it little Caesar. So finally, they compromised on naming it little Caesar pizza treats.
The first part of the name picked up quickly, which led to the business being named Little Caesar. In 1982 the couple bought the red wings team from Detroit.
In 1992, they also purchased the Detroit Tigers team. Mike passed on in 2017, leaving the company to his wife, Marion.
Is Little Caesar Pizza Any Good?
Little Caesar pizzas are the best budget pizzas. Their products are famous among middle and low-income earners as they are affordable. This is why it’s not uncommon to find long queues in their stores.
Their pocket-friendly pizzas are ideal for large families. However, if you are hosting a birthday or have a few friends over, you can count on little Caesar to fill their stomachs without draining your pockets.
If you are looking for a quick and affordable pizza treat, little Caesar is the right place for you. However, their pizzas have not yet won any quality awards.
This is not to say that their products are substandard. However, compromising their ingredients reduces the quality of their pizzas.
Another good thing associated with little Caesar is fast service. Securing your order is just a matter of walking into their store, placing an order, and walking out with your pizza.
They also emphasize serving clean food. Most little Caesar stores use advanced food technology to receive and package orders. The most commonly used technology is the pizza portal pickup.
Customers only need to scan a QR code on their phones to set their order. This automatically completes the demand for them to release their pizza from a heating compartment. Again, this facilitates contactless food pickup.
The Rise, Fall, And Rise Of Little Caesar
Since its founding in 1959, little Caesar pizza has registered an upward trend for almost four decades. The company had challenges but still managed to record massive profits.
Little Caesar franchised its second location after three years in business. By the end of 1960, the company had over fifty outlets. Their business model was to open up a bunch of restaurants and serve quick fast pizzas.
In the 1980s, the company had over 500 locations spread across the United States. They kept doubling their expansion, and by the late 1990s, they had over 4000 outlets.
Their growth in popularity is attributed to their humorous advertising campaigns. The company invested 5% of its earnings in advertisements each year. This was enough to sustain its growth.
Little Caesar witnessed a depressing season between the early 1990s to mid-2000s. Little Caesar registered losses year after year.
Competition stiffened at this time, and there was no increase in demand for pizzas. Papa John’s were their main competitor at this time.
Little Caesar also changed their advertising agency which led to the loss of brand awareness. As a result, their revenue dropped from 2 billions in 1992 to 650 million in 2002.
The second rise
The second raise took place from the mid-2000s to date. The company is back to expansion and is currently one of the biggest pizza chains in America.
We can all agree that Little Caesar is the most famous pizza chain in America. Their market share continues to increase with each day.
Little Caesar has found a way of meeting this demand and profiting from it.
Little Caesar is known to use small restaurants and make their ingredients. These are some of the strategies they use to reduce their costs.
The company incurs relatively lower costs of production compared to its competitors. This allows them to continue offering cheap pizza while making profits.