Little Caesars Rolls Out Nationwide Delivery

January 6, 2020

David Scrivano, President and CEO of Little Caesars, breaks down the chain's new nationwide delivery plans and what's next for the company.

FULL TRANSCRIPT

Kristen Scholer: Welcome back to Cheddar Business everyone.

Kristen Scholer: Little Caesars Pizza ready to hit the streets.

Kristen Scholer: The company rolling out nationwide delivery

Kristen Scholer: today for the first time in decades.

Kristen Scholer: And joining us now is David Scrivano,

Kristen Scholer: President and CEO of Little Caesars.

Kristen Scholer: Uh, David, why was now the time to move into delivery?

David Scrivano: Uh, I think now's the time because Little Caesars has

David Scrivano: finally found a way to offer

David Scrivano: great value to customers using delivery service.

David Scrivano: Um, we've always been a carry out company,

David Scrivano: and we've always offered the best value.

David Scrivano: Now we can offer that value in delivery.

Brad Smith: And so how is tech impacting

Brad Smith: that delivery experience for customers?

David Scrivano: Well, it's super simple for customers to order delivery.

David Scrivano: Um, they go on our mobile app,

David Scrivano: they get what they want, um,

David Scrivano: it feeds directly into our store and then we've

David Scrivano: integrated with our third party provider DoorDash.

David Scrivano: The key to the whole thing is

David Scrivano: what we call the pizza portal.

David Scrivano: The pizza portal is a heated locker box, uh,

David Scrivano: your pizza's placed into that heated box,

David Scrivano: the DoorDash driver comes in,

David Scrivano: types in the code and takes

David Scrivano: the customer's pizza for delivery. Very efficient.

Kristen Scholer: So I guess I'm wondering, David,

Kristen Scholer: how Little Caesars did business

Kristen Scholer: without doing delivery for so long.

Kristen Scholer: I mean, pizza's like the top thing

Kristen Scholer: probably that people want delivered.

David Scrivano: Yeah. Well, uh, Little Caesars has been very,

David Scrivano: very successful with carryout,

David Scrivano: and the reason is customers get the best price.

David Scrivano: We have a hot and ready model where you can come in,

David Scrivano: pick up your pizza whenever you're

David Scrivano: ready at the lowest price.

David Scrivano: Now, you can get

David Scrivano: that great same price delivered right to your door.

Brad Smith: Why was DoorDash the right

Brad Smith: partner with this particular venture,

Brad Smith: because it seems like a lot of

Brad Smith: other companies have opted to just say,

Brad Smith: all right, DoorDash, you can list us.

Brad Smith: We'll just list on your platform directly.

Brad Smith: It sounds like you're sending people to your app and

Brad Smith: then DoorDash is fulfilling the order on their side.

Brad Smith: So you're keeping data, DoorDash is keeping data.

Brad Smith: Uh, why them as a partner?

David Scrivano: You know, first of all, DoorDash has been a great partner

David Scrivano: throughout the test and through this implementation.

David Scrivano: Uh, they're the largest, they're the fastest growing

David Scrivano: of third party delivery providers.

David Scrivano: Um, but I think the key is going through our app.

David Scrivano: That helps us keep our costs

David Scrivano: low that we pass along to our customers.

David Scrivano: So DoorDash and us integrating together,

David Scrivano: our app with their app makes a lot of sense.

Kristen Scholer: Uh, David, cloud kitchens or ghost kitchens,

Kristen Scholer: right, had become a popular term

Kristen Scholer: just in the past six months or so.

Kristen Scholer: Basically this idea that you

Kristen Scholer: don't have a physical restaurant,

Kristen Scholer: you just have the space where you make

Kristen Scholer: orders to go that are then delivered.

Kristen Scholer: Is that something that uh,

Kristen Scholer: Little Caesars has considered?

David Scrivano: Sure. You know, we're looking into cloud kitchens.

David Scrivano: I think it's a great idea.

David Scrivano: Um, you know, it's still in its, in its infancy.

David Scrivano: So we have to see how it comes

David Scrivano: along over the course of time.

David Scrivano: We're exploring that possibility and uh, yeah.

David Scrivano: Maybe that'll pop up in the future.

Brad Smith: Would that allow for you to do things like, you know,

Brad Smith: increase the number of items that are on your menu,

Brad Smith: menu innovation? What would that look like?

Brad Smith: How would a cloud kitchen's

Brad Smith: facilitate a better kind of transaction

Brad Smith: and workflow for delivering on some of

Brad Smith: those newer items once you

Brad Smith: do add those to the menu as well?

David Scrivano: Well, I think what CloudKitchens do mostly is put,

David Scrivano: uh, our product closer to the consumer.

David Scrivano: So in markets that we may not be fully penetrated,

David Scrivano: CloudKitchens will bring us closer. I think that's great.

David Scrivano: Now regarding menu innovation, uh,

David Scrivano: one of the great things about using our app, um,

David Scrivano: you can order anything on our menu at the same price,

David Scrivano: whether it's delivered or carry out.

David Scrivano: So I think it's- uh,

David Scrivano: when you mention menu innovation,

David Scrivano: we got great products,

David Scrivano: uh, you can get a stuffed crust pizza,

David Scrivano: you can get a thin crust pizza,

David Scrivano: you can get our Detroit style deep dish pizza online,

David Scrivano: ordered through delivery or carry outs. It's pretty cool.

Kristen Scholer: In terms of what consumers can expect in the new year,

Kristen Scholer: David, I'm sure they're thrilled that they will

Kristen Scholer: now have delivery as an option.

Kristen Scholer: But what else should they be anticipating in 2020?

David Scrivano: You know, I think we'll have some great new products,

David Scrivano: uh, lined up come- come in,

David Scrivano: uh, you know, the springtime and,

David Scrivano: uh, we'll announce those when the time comes.

David Scrivano: Uh, but Little Caesars always provides, you know,

David Scrivano: a great product, uh, great new products.

David Scrivano: Uh, we came up with the bacon wrapped deep dish,

David Scrivano: the pretzel crust pizza.

David Scrivano: Um, you know, and we'll continue

David Scrivano: to come up with new products.

David Scrivano: I think that's the future of this year.

David Scrivano: Um, for right now, of course,

David Scrivano: uh, delivery is the big news.

Kristen Scholer: Okay. So what about, uh, I- items like

Kristen Scholer: meatless sausage, meatless pepperonis, right.

Kristen Scholer: These whole meatless craze, uh,

Kristen Scholer: David, so they had a moment in 2019.

Kristen Scholer: I'm wondering if that's something you're

Kristen Scholer: considering for 2020.

David Scrivano: Yeah. Well, we actually did test impossible,

David Scrivano: pizzas and impossible supreme pizza.

David Scrivano: The tests went very well in late 2019.

David Scrivano: And it's on the docket for

David Scrivano: a possibility of an implementation in 2020.

David Scrivano: So I look forward to that possibility, um, you know,

David Scrivano: consumers are moving in that direction and- and

David Scrivano: Little Caesars likes to go where the consumer is.

Brad Smith: Are pizzas getting more expensive for consumers?

Brad Smith: I mean, all of the fees that get, kind of,

Brad Smith: raked in on the delivery side when you add in

Brad Smith: the service fees and

Brad Smith: other charges that could be labeled any which way,

Brad Smith: that customers scratch their head about and say,

Brad Smith: you know, I wonder what that's actually going towards.

Brad Smith: Is the price of the pizza getting more expensive with

Brad Smith: all the streamlining of

Brad Smith: the operations or is it getting cheaper?

David Scrivano: You know, the exciting thing about

David Scrivano: Little Caesars is we're gonna have the same price,

David Scrivano: whether it's delivered or carry out.

David Scrivano: And I agree with you.

David Scrivano: I've seen in the pizza business

David Scrivano: that the pizza companies have been

David Scrivano: raising their price for delivery

David Scrivano: and lowering their price for carryout.

David Scrivano: The beauty of- of our delivery system

David Scrivano: is that we're gonna offer the same price,

David Scrivano: delivered or carry out, and yes,

David Scrivano: we will have a delivery fee that pays for that driver.

David Scrivano: Um, but you're gonna pay the same price,

David Scrivano: whether you walk in the store or you get it delivered.

Kristen Scholer: Uh, so David, you said that

Kristen Scholer: you're considering rolling out some of

Kristen Scholer: these meatless options and you tested with impossible.

Kristen Scholer: What's gonna be determ- the determining factor as to

Kristen Scholer: whether or not this becomes a mainstay menu item for you?

David Scrivano: Well, it- it will certainly be driven by the consumer.

David Scrivano: Uh, we can sit- continue to, uh,

David Scrivano: to test with consumers and if the appetites there,

David Scrivano: then it would become a supply issue.

David Scrivano: So we have to ensure that the, uh,

David Scrivano: that the meatless companies are- are

David Scrivano: certainly have enough supply to supply chain.

Kristen Scholer: All right, David Scrivano,

Kristen Scholer: I think Brad and I are getting a little hungry up here.

Kristen Scholer: He's the president and CEO of

Kristen Scholer: Little Caesars. Uh, thanks for joining us.