News

Little Caesars gaining strength after time of struggle

September 11, 2003

DETROIT -- Following years of struggle and unit number losses, it appears Little Caesars' pizza army is marching forward again.

According to the Detroit News, a return to fresh cheese, new menu offerings, revamped stores, employee retraining and other initiatives have helped the Detroit-based chain's same-store sales rise 11 percent in 2002 (See "Little Caesars sales rise 11% in first half of 2002.")

That figure, plus a 7 percent increase in comp-sales in 2001, said Christopher Ilitch, co-president of Ilitch Holdings, which owns the 3,700-store chain, shows the chain's comeback is no flash in the pan.

"(I)t's the result of three years of steady efforts to improve our business," Ilitch told the Detroit News.

Neither the privately held company nor its UFOC provides detailed sales or profits reports, though gross sales are estimated to range between $1.1 billion and $1.3 billion.

Ilitch credits the company's renewed focus on food quality and innovative products with the turnaround.

Recently launched items include: Deep Dish Pizza Pizza; Buffalo Chicken Pizza; Cheddar Stuffed Crust Deep Dish Pizza; and Kidz Krazy Bread (flavored pizza dough made in multiple colors).

Additionally, it continues to re-image stores under a campaign originally called Little Caesar 2000. The updates include new restaurant interiors, tile floors, brighter colors, countertops, signage and wall coverings. The company's famous Pizza Man logo was also updated from a full portrait to a half-figure silhouette.

Franchisees, who for much of the 1990s battled with the franchisor (See "Little Caesars settles lawsuit with franchisees.") for a new and improved contract penned in 2001, call the changes beneficial.

"The new image campaign is very good, no question," said Ernest Koury, president of Pizza Pizza Corp. in El Paso, Texas, which operates 12 units. "We had an outdated image before, and customers were not responding. But the new look, the fresh cheese and the certification program have been phenomenal. We really like the direction of Little Caesar's."

A certification program the company launched over the last three years instilled a new sense of direction for franchisees, Koury added. "We're trading more ideas back and forth now."

Ilitch also attributes recent growth to a Manage To Own program. Launched two years ago, the program allows company managers the opportunity to buy their own restaurants. Several dozen managers have signed on for the program, said David Scrivano, Little Caesar's senior vice president of administration.

Still, the company must weather the challenge of losing stores located in Kmart stores (See "Kmart closures to slice 101 Little Caesars Pizza Stations.") In an attempt to emerge from bankruptcy, Kmart has closed several hundreds stores. The completion of the Kmart closures will affect nearly 300 Little Caesars outlets. Currently 411 Little Caesars are operating in Kmart stores.