Little Caesars Pizza this week rolls out Pizza by the Foot, the latest in a series of products designed to pull the chain out of its sales slump.
The kickoff is backed by a humorous $10 million campaign from Cliff Freeman & Partners, New York.
The product, a 3-foot-long rectangular pizza, is being positioned as a family value meal, according to franchisees and executives familiar with it. The pizza will be packaged with seasoned Italian bread and will sell for $10.99.
SAFETY FIRST
A 30-second ad breaking today on national network TV shows a customer ordering Pizza by the Foot for carryout. A Little Caesars employee directs the customer to an airline-style safety video, with instructions on handling the oversize pizza box. The customer still proceeds to whack the TV monitor, hit another customer and take out a door before getting the box out of the store.
Little Caesars wouldn't comment on the new product prior to its official unveiling today.
The No. 3 pizza chain spent $61 million on advertising last year, according to Competitive Media Reporting.
But Little Caesars sales have been flat for the past two years in a relatively stagnant market. The chain reported systemwide sales of $1.8 billion in 1995, down 10% from 1994.
DELIVERY HAD LITTLE IMPACT
The chain's big news last year was its entry into delivery, a costly venture aimed at giving it a hook against rivals Domino's Pizza and Pizza Hut. The effort failed to have a significant impact, though, and many franchisees have stopped delivering.
Its most recent product introduction, last summer's Giant Caesar Pizza, was along the same value-oriented line. The 18-inch pie, priced at $9.99, was 65% larger than a standard 11-inch large pizza.
The launch comes at a time when major players in the pizza segment are all trying to spark sales. Pizza sales are forecast to grow 2% to 2.4% this year, according to industry watchers and analysts.
"The category has been hit by other competitive opportunities," said Ron Paul, president of restaurant consultancy Technomic. "You have Boston Market doing $1 billion in sales .*.*. Consumers can say, `Instead of pizza, I have other take-out options,'*" he said.
PIZZA HUT STRUGGLES TOO
Even segment leader Pizza Hut is having a difficult time. Third-quarter earnings from parent PepsiCo show Pizza Hut's same-store sales slid 10% compared with the same period last year, when the chain got a significant boost from the rollout of Stuffed Crust pizza. Through September, Pizza Hut sales are down 5%, $2.6 billion.
This month Pizza Hut has tried to re-energize Stuffed Crust by launching a national TV and radio campaign from BBDO Worldwide, New York, themed "We've got your pizza."
Insiders at PepsiCo said Pizza Hut is also developing a gourmet, brick-oven style pizza to capture a share of the upscale market and command a higher check average.
Meanwhile, No. 2 ranked Domino's is undergoing a $150 million re-imaging campaign, including a new logo, store and uniform redesign. Grey Advertising, New York, is the agency.
The top three pizza chains combined control half of the $20 billion takeout/restauraunt pizza market, according to Techno-mic.
