Little Caesars is one of the cheapest pizza chains because they keep their production costs and overhead low.
One of the main reasons Little Caesars appeals to customers is the low price point.
Customers of Little Caesars aren’t looking for artisanal pizza or anything fancy.
Rather, those who go to Little Caesars are interested in a tasty, fast, and affordable treat.
Why Is Little Caesars So Cheap?
1. A Less Expensive Cheese Blend That Lasts Longer
You’re probably used to most pizzas using 100% mozzarella cheese.
If you’re a pizza aficionado or enthusiast, you might enjoy a margherita pizza, which is made with fresh mozzarella.
The main difference between regular mozzarella and fresh mozzarella is the moisture content.
Generally, fresh mozzarella sits in a brine and is molded by hand.
Fresh mozzarella doesn’t last very long and is best served as soon as possible after it’s made.
On the other hand, a low-moisture mozzarella will last for several weeks or even months.
Little Caesars always opts for very low-moisture mozzarella.
The low-moisture content in the cheese Little Caesar’s uses allows them to keep it for longer.
The longer the cheese lasts, the less cheese Little Caesars wastes.
In addition, it also means that deliveries aren’t as frequent, which can further reduce costs.
However, Little Caesars takes their cost-cutting cheese one step further.
Instead of using mozzarella cheese exclusively, there’s a second cheese involved.
Muenster cheese is a tasty, affordable cheese that’s very popular in the United States and elsewhere.
Instead of being mozzarella purists, Little Caesars utilizes a blend of cheeses.
By combining low-moisture muenster and mozzarella, Little Caesars reduces the cost of their cheese while offering a unique, tasty combination that customers seem to love.
2. Keeps It Simple
Little Caesars keeps it simple.
Some pizza chains try to branch out beyond the usual offerings expected by customers.
For better or worse, Little Caesars doesn’t deviate from a fairly predictable list of items.
One of the things most of these items have in common is that they’re all components of pizza.
The vast majority of menu items at Little Caesars include bread, cheese, sauce, or a combination of all three.
Toppings are usually an additional charge and include pepperoni, veggies, and extra cheese.
Customers also rave about the sides at Little Caesars, most of which are cheesy breads.
Another food option Little Caesars has is wings, which are practically an American staple.
One of the cheapest parts of the chicken, wings are simple and easy to make.
Little Caesars ties it all together with its Caesar Dips.
There are four dip options: cheezy jalapeno, buffalo, BBQ, and garlic parmesan.
All told, Little Caesars has a short shopping list of ingredients and manages to utilize all of them very efficiently.
Fewer ingredients translate to less waste and more predictability.
Little Caesars Crazy Bread really isn’t all that crazy.
The bread is mostly just pizza without the sauce and toppings.
In some cases, it’s still the bread and the cheese, less the sauce.
Maybe it’s just bread and one of the dips.
In either case, Little Caesars is mostly using the same ingredients for its pizza, toppings, and sides.
Sure, wings are a little different, but they’re cheap and offer a little variety on the menu.
Of course, the dips are good for everything.
Little Caesars very cleverly manages to take a simple approach with its menu items.
This simplicity and efficiency is one of the many reasons Little Caesars is so cheap.
3. Employees Aren’t Generally Paid Very Much
Most people in the fast-food industry don’t make very much money.
It’s a well-known fact that the restaurant industry is fast-paced and high risk.
Even owners in the restaurant industry rarely make money.
Most restaurants tend to go out of business quickly.
Little Caesars, on the other hand, has a successful franchise model.
The world-famous pizza chain has global recognition and stability not found in other restaurants.
Part of the success of Little Caesars’ model depends on low overhead.
With one of the key components of overhead being employees, it makes sense that Little Caesars’ employees aren’t paid much.
In the food service industry, restaurant employees are often paid the minimum wage allowable by law.
Little Caesars is no exception to this generalization.
Even a manager at Little Caesars isn’t going to make very much money.
According to the web, team members at Little Caesars earn an average of $8 to $10 per hour.
Even an area manager at Little Caesars only makes a reported $21 or $22 per hour.
If Little Caesars were to pay its employees more, that would cut into its margins.
Lower profit margins mean disgruntled franchise owners and less revenue for the company.
These would, in turn, lower the value of the Little Caesars brand.
In order to maintain revenues and profits, Little Caesars keeps its expenses in check.
The aforementioned cheese is one way Little Caesars cuts back on expenses.
Employee pay is another check on Little Caesars’ overhead.
Even if employees were only paid a couple of dollars more per hour, Little Caesars’ numbers would completely change.
Because Little Caesars runs such a tight ship, it can afford to sell cheap pizza, breadsticks, and wings.
However, if employees were paid more, that money would have to come from somewhere.
Since they wouldn’t be likely to compromise on the ingredients, Little Caesars would be hard-pressed to compensate for the budget shortfall.
Therefore, for a profitable company like Little Caesars, it should come as no surprise employees aren’t paid very much.
4. Saves On Their Tomato Sauce And Dough
Perhaps you’re beginning to see a trend here.
Little Caesars is very smart about saving.
By identifying where they can save without compromising on the quality of the product, Little Caesars has really done itself a great service.
The profit margins are maintained on each pizza that’s sold because of the savings on cheese and overhead.
Another pair of costs that Little Caesars keeps down is its tomato sauce and dough.
Rather than purchasing dough and sauce, Little Caesars makes it’s own.
This goes a long way in terms of cost savings, but has another benefit, too.
Since they make these items in-house, they’re often fresher than if they were purchased pre-made and stored on-site.
This is a win-win for everyone.
Unfortunately, it’s not all good news for customers of Little Caesars.
Rumor has it that Little Caesars’ tomato sauce is made with tomato concentrate.
Since the flavors in the tomato concentrate would be too strong, Little Caesars adds water to its tomato concentrate.
The end result is a more balanced tomato sauce.
Of course, it’s also a cheaper tomato sauce.
Making their own dough in-house also saves Little Caesars quite a bit on costs.
This is especially relevant because so many of the ingredients on the menu are bread-based.
Whether it’s pizza dough or their breadsticks, employees are almost always making bread.
Apparently, Little Caesars figured out that employees making bread is cheaper than buying pre-made bread.
Again, this is something that would be appreciated by customers, though maybe not so much by employees.
Doing things in-house gives Little Caesars an edge in freshness, and helps to keep costs down for customers, driving more business.
5. They Count On People Buying More
While you can walk into Little Caesars and buy a pizza for $5, you probably won’t.
Another strategic move by Little Caesars is counting on people buying multiple items.
Other more expensive pizza chains might be okay with you buying a single pie and heading out.
This is a very popular sales technique known as upselling.
The idea is to get the customer in the door, then tempt them with some of your other offerings.
Fortunately, every item on the menu at Little Caesars is pretty reasonably priced.
Little Caesars is okay with that, as long as customers continue to buy multiple items instead of just one.
They’re happy to give you low prices in exchange for you buying three or four items when you had initially only planned on buying one.
They know that having great prices attracts customers.
They also know that people are going to justify buying more when the price is lower.
This even applies to people who might not necessarily need or want the second or third item.
A large part of the reason they buy it anyway, however, is that they see how cheap it is.
Get the customer in the door and upsell.
Instead of trying to sell one pizza for a five-dollar profit, Little Caesar’s banks on customers buying two or three items making a profit of two or three dollars on each one.
In that way, Little Caesars is able to make up for its low prices.
The low prices and buying more go hand-in-hand with one another.
If prices were high, customers wouldn’t buy as much.
With prices remaining low, Little Caesars figures it can keep getting people to buy more and make up for the fact that the profit margins on each item it sells are usually pretty modest.
6. They Take It Easy On The Toppings
Pizza itself is not a particularly expensive food.
Flour is cheap, so dough is cheap.
Tomatoes aren’t particularly expensive, making sauce affordable.
Cheese can be somewhat expensive, but we already covered how Little Caesars manages to get around that particular issue.
Some people know that too many toppings can prevent the pizza from cooking properly.
While that’s certainly a legitimate concern, there’s another concern Little Caesars considers concerning toppings.
Toppings are expensive.
Pepperoni, sausage, fresh vegetables, extra cheese, and other popular pizza toppings are pricey.
Little Caesars has its operation down to a science.
That process, of course, includes recipes and ratios designed to keep prices low, profits high, and pizza tasty.
Some customers have complained about the ratio of cheese to sauce on Little Caesars pizza.
A few have even accused Little Caesars of skimping on the cheese and putting too much sauce.
Others have complained that Little Caesars takes it a little too light on the meat toppings.
Whether this is the company’s intent or employees are told to do things in this way remains unclear.
What is clear is that Little Caesars isn’t going to be the most generous pizza chain when it comes to toppings.
There are those who prefer light toppings and a greater sauce to cheese ratio.
In any event, it should come as no surprise that Little Caesars isn’t going to give you a pound of meat heaped atop a fresh, bubbly pizza for six dollars.
You can’t expect to get everything you want in a pizza for so little money.
In a battle of quantity vs. quality, Little Caesars is always going to go for quantity.
7. Leveraging The Little Caesars’ Franchise Model Gets Everyone Discounted Rates
Everyone knows that you can get a discount when you buy in bulk.
As one of the largest pizza chains in the world, Little Caesars has some serious connections.
With well over 5,000 locations worldwide, Little Caesars is no small-time operation.
One of the benefits of being so big is being able to get bulk discounts.
Little Caesars has arrangements with all sorts of suppliers and vendors.
This two-way relationship is founded on Little Caesars buying a lot and the vendors providing them with a discount so that it’s worthwhile for Little Caesars to continue buying from them.
Franchisees can take advantage of the relationships that Little Caesars has built.
As a result, the suppliers continue to get large, predictable orders from Little Caesars.
Virtually every large company will employ this same model, and it’s easy to see why.
It’s simple economics, really.
If a producer can sell more of its products, that producer will be able to produce more of its products for cheaper.
To retain its customer base (particularly key customers like Little Caesars), producers will pass those discounts along to customers.
The consistency of large orders from Little Caesars’ franchises gets discounts for everyone.
With lower costs comes savings for everyone, producing a trickle-down effect.
While ordinary small businesses won’t be able to get these discounts, Little Caesars uses volume to its advantage.
Fortunately for its customers, Little Caesars allows us to effectively enjoy its bulk discounts.
You probably won’t be able to buy shredded cheese for as little money as Little Caesars can, but you will be able to get a pizza at the world-famous restaurant for as little as five dollars.
8. Makes Its Dough In House
Many restaurants will make an effort to minimize the amount of work they have to do.
This is common not only for restaurants but in every business.
Outsourcing is a very common business practice to increase convenience and lower costs.
It’s also used to improve efficiency and simplify business.
In some cases, however, outsourcing can complicate processes, and even be more expensive than the alternative.
Little Caesars takes a bit of a different approach to making its food.
While they don’t have their own farms for growing wheat and raising cows for cheese, Little Caesars does make its dough in house.
Little Caesars uses a simple dough recipe consisting of flour, water, sugar, salt, yeast, and soybean oil.
They make their dough fresh daily, saving on having to pay for pre-made dough, and pleasing customers with fresh dough and bread daily.
This works especially well because so many of the menu items at Little Caesars are bread-based.
All the ingredients that go into Little Caesars’ dough are quite cheap.
Since they use so much of them, they get the bare-bones pricing.
Eliminating the somewhat significant expense of outsourced manual labor required to make the dough,
Little Caesars saves quite a bit by having its employees make the dough used in the pizza and breadsticks.
This is yet another reason the popular pizza chain is so cheap.
9. They Only Offer Affordable Options On Their Menu
We live in a world with seemingly endless high-end, unique culinary offerings.
Little Caesars is not one of them.
Part of the Little Caesars brand is the fact that all the menu items they offer are affordable.
Customers of Little Caesars expect that whatever they order will be fresh, tasty, and most importantly, inexpensive.
Little Caesars knows its patrons well and knows how to give them what they want.
Those interested in a fine-dining experience or a long list of creative dishes will not find solace in the menu at Little Caesars.
In reality, Little Caesars takes a near-polar opposite approach to what many restaurants are doing nowadays.
Instead of exploring higher-end options, Little Caesars makes sure everything on its menu is cheap to make.
This way, Little Caesars can charge its customers less and still make a profit.
We mentioned earlier that Little Caesars’ menu really consists of just a few staple items.
Bread, sauce, cheese, dips, pizza toppings, and wings are essentially all that Little Caesars does.
While some items like meat and vegetable toppings can be more expensive, the prices of most of these foods are relatively low.
There’s nothing special about the ingredients at Little Caesars.
You could go to the store and buy the same ingredients to make yourself a pizza and wings.
Of course, Little Caesars has its proprietary processes and brings you a lot of time savings and convenience.
At the end of the day, Little Caesars isn’t doing anything magical to keep their prices low.
They take care to choose affordably priced dishes made with low-cost ingredients.
This way, they don’t have to pay much for the foods they serve, and customers don’t have to pay much to enjoy them.
10. They Charge For Delivery
Little Caesars charges $2.99 for delivery, plus a mandatory tip for its drivers.
While the pizza, wings, and breadsticks are cheap, delivery is not.
Many other pizza chains offer free delivery.
Little Caesars demands its customers come to the restaurant if they want to take full advantage of the low pricing.
By charging for delivery, Little Caesars passes on the entirety of the cost of that service to the customer.
Little Caesars keeps its margins tight on everything it does.
Unfortunately, free delivery doesn’t fit into the budget.
At Little Caesars, you’ll save on your pizza and toppings, but you’ll have to play by their rules.
You can’t expect to save on everything, so you’ll have to pick and choose what matters most to you.
When you factor in all the costs, Little Caesars may be the cheapest pizza out there, but don’t let these low prices fool you, since it’s still a successful, profitable company.