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This is why Little Caesars won't be investing in delivery

  • Little Caesars' CEO told CNBC that its "Hot-N-Ready" model has made it one of the fastest-growing chains over the last decade.
  • "While everyone else is chasing delivery, Little Caesars is letting the customer come to them," Darren Tristano, chief insights officer at Technomic, told CNBC.
  • Little Caesars currently has no plans to add an in-house delivery service, but customers can use third-party companies.
Little Caesars’ new “ExtraMostBest” Pizza is a regularly sized pie with mozzarella, muenster cheese and more than 50 slices of pepperoni, for $6.’
Source: Little Caesars
Little Caesars’ new “ExtraMostBest” Pizza is a regularly sized pie with mozzarella, muenster cheese and more than 50 slices of pepperoni, for $6.’

Delivery isn't on the menu for this pizza place.

Little Caesars' CEO told CNBC that its "Hot-N-Ready" model is working just fine. The company is one of the last big, national pizza chains not offering delivery.

"Our customers know that it is exceptionally fast to pick up a pizza [at Little Caesars] versus waiting 35 [to] 45 minutes or an hour for delivery," David Scrivano, CEO of Little Caesars, told CNBC.

At a time when many other restaurant chains are adding delivery — including fast-food giants such as McDonald's — Little Caesars' business model relies heavily on ready-made pizzas, wings and crazy bread that customers can purchase with little to no wait time. Scrivano said its value proposition and convenience have made it one of the fastest-growing chains over the last decade.

Many of Little Caesars' locations are in economically challenged communities, Darren Tristano, chief insights officer at Technomic, told CNBC. These customers are less likely to pay for delivery fees or tips, he said.

"Cost-conscious consumers will stop in as part of their regular routine and will find the Hot-N-Ready products within their definition of convenience," Tristano said. "While everyone else is chasing delivery, Little Caesars is letting the customer come to them."

While the company currently has no plans to add an in-house delivery service, some customers can use third-party companies like Door Dash, GrubHub and Post Mates, among others, to purchase Little Caesars pizza and have it delivered. However, Scrivano said, the company doesn't create the online profiles for these delivery sites.

"Not going into delivery does prevent Little Caesars from accessing a growing part of the market," Neil Saunders, managing director of GlobalData, told CNBC. "That said, the delivery market is already crowded and competitive, so the company would have to work hard to attain growth there, and may have to increase spending on advertising and marketing to do so."

Third-party services ease the financial burden of creating an in-house delivery operation and will placate customers who want the option of delivery, Saunders said.

"In my view, the company considers its brand [to be] strong and unique enough to pull people into collecting from its stores," he said.

While Little Caesars will not be developing its own delivery service, the chain is in the process of rolling out online and mobile ordering to its locations.

"Everybody uses online ordering and expects to go on a mobile app," Scrivano said.

Digital orders have increased by 45 percent since 2014, according to The NPD Group, and now account for nearly 1.7 billion in food service visits.

In addition, mobile-order checks tend to be as much as 20 to 30 percent higher than a traditional in-store check. That's because customers have more time to consider their options, and restaurants are better able to offer upgrades and add-ons to meals to ring up a higher sale.

Little Caesars' lower price point means a lower average check, but its convenience and innovative limited-time offers keep customers coming back.

The chain has offered up bacon-wrapped pizza, bacon cheddar bites and pretzel pizza in the past for about $5 each. Most recently, Little Caesars has launched the "ExtraMostBestest" pizza, which is a regular-size pie with mozzarella, muenster cheese and more than 50 slices of pepperoni, for $6.

"I think our customers like the variety, but come for the great value," Scrivano said.