Dive Brief:

• Little Caesars has partnered with DoorDash to offer delivery through its app and website, with DoorDash providing last-mile delivery, according to a press release. 
• The pizza company, which previously only offered pickup, will offer the same menu prices for delivery and pickup and claims its delivery will cost at least $5 less than the top national pizza chains.
• Heated self-service mobile order pickup stations called Pizza Portals will notify delivery drivers when the pizza is ready.

Dive Insight:

Pizza delivery is only going to get more competitive this year with more pickup and dine-in pizza chains eyeing off-premise opportunities. MOD Pizza entered into an exclusive, nationwide partnership with DoorDash last year and Blaze Pizza partners with the top four delivery providers.

With Little Caesars' model already off-premise only, it will be ideally equipped to integrate delivery into its operations. Its Pizza Portals integrates with its point-of-sales system and connects to its app and website, allowing customers to order ahead, pre-pay and choose pick-up or delivery. So it won’t have to test or build a pickup system from scratch. Little Caesars' biggest challenge will be to change customer behavior to order delivery, especially since customers are more used to pickup.

The company has been pushing for more innovation and differentiation of late, becoming one of the first nationwide pizza providers to offer a plant-based menu option in May 2019 nationwide. It also launched its Pizza Portals in 2018, a year before Pizza Hut tested pickup cubbies in California. 

These innovations seem to help as the company grew its sales by 3.5% to about $3.8 billion in 2018, according to Restaurant Business, but it is still far behind Pizza Hut, which had sales of about $5.5 billion in 2018 and has nearly half as much sales as Domino’s, which posted sales of nearly $6 billion that same year.

Opening up an untapped channel for Little Caesars will likely help it continue to grow sales in 2020, but it will be interesting to see if delivery ends up being profitable. It claims to offer delivery at a lower cost than its competitors and won’t adjust pricing for delivery, two areas that other companies have had to adjust to make this venture worth the internal costs.