Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, May 22, 1993 TAG: 9305220090
SECTION: BUSINESS PAGE: A-4 EDITION: METRO
SOURCE: Associated Press
DATELINE: DETROIT LENGTH: Medium
If you wanted an inexpensive carryout, you dropped in on Little Caesars.
If you wanted a hearty sit-down pizza, you went to Pizza Hut.
Those distinctions are now starting to blur as pizza makers invade each other's turf and spot new trends in pizza promotion.
Although Little Caesars is still trailing in sales in the Big Three pizza pack, the Detroit-based chain is leading the way in giving 1990s customers what they want - more pizza and side dishes at a low price, plus convenient carryout counters.
No. 1 Pizza Hut and No. 2 Domino's - both losing market share to Little Caesars - are taking notes and following suit. They are running dinner promotions including salads, garlic bread and even cookies at special prices.
Domino's, which made its fortune in the 1980s with its 30-minute delivery guarantee, is building carryout counters. And Pizza Hut, taking its cue from Domino's, started delivering pizza in 1987.
"If we're going to be the first pizza choice, we needed to bolster our carryout and delivery, so we've turned up the heat," said Rob Doughty, marketing communications vice president for Pizza Hut, based in Wichita, Kan.
Pizza strategies have reversed over the past two decades.
In the past, "the decision-making was based on what Domino's was doing with free delivery," said Domino's marketing vice president Larry Sheehan, a Little Caesars executive in the 1970s.
Now, decision-making is based on what Little Caesars is doing with carryout and inexpensive pizzas.
The competition has led all three to offer affordable yard-long pizzas.
"Our niche is value, and being affordable is a key to our success," said Denise Ilitch Lites, Little Caesars senior executive vice president.
Little Caesars' sales, including England and Canada, grew 19 percent to $2.05 billion in 1992, closing in on Domino's. U.S. sales at Domino's, based in Ann Arbor, Mich., are estimated to have dropped 4 percent to roughly $2.3 billion last year, analysts say.
Pizza Hut's U.S. sales grew 4.9 percent to $4.3 billion last year.
"We had been sliding, but we have turned since the first of the year and have seen improved sales," Domino's Sheehan said. "Domino's was a sleeping giant for a few years, but we woke up the giant."
Sheehan predicts that by summer, Domino's sales will be on par with its peak 1990 year, when it sold $2.6 billion worth of pizza.
"Our concern is more going after Pizza Hut than worrying about Little Caesars coming after us," he said. "We really don't expect to lose the numbers to Little Caesars. We expect to take No. 1."
by CNB