A Saucy Fight for a Slice of the Pie

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Sometimes the battle goes to the cheapest instead of the swiftest. Little Caesars, a group based in Farmington Hills, Mich., has become the third largest chain (1,950 outlets) by offering two pizzas for what one would cost at a rival's restaurant. Wherever a Little Caesars pops up, competitors meet its prices. Industry experts contend that widespread discounting is tempting restaurants to skimp on toppings. "They are cutting ingredients. We have not done that, but I know this is going on," says Jack Harris, a director of Pizza Inn, the Dallas-based chain of 719 restaurants.

One aggressive new contender claims to offer the best of everything. Casino's, a 23-outlet Miami company, says its pizzas contain 50% more cheese than Domino's pies do. Casino's also beats its rival's $3 lateness discount by giving away any pizza that takes longer than 30 minutes to arrive. The battle in Miami between the two chains is escalating. Not only do both offer discount coupons, but they also accept their rival's chits and grant an additional $1 ! markdown. Whenever John Hattesen, manager of a wholesale fabric company, has a poker party, he orders a pizza from both chains and gives each deliveryman the other company's coupon. "So far, there haven't been any fights," he says.

Round Table Pizza, a San Francisco-based firm, has tried to stay above the discounting fray by hewing to quality. With 550 outlets, mostly in the West, Round Table offers superior ingredients -- and plenty of them. Its mozzarella, for instance, is made of whole milk instead of skim milk. Unlike some chains, which make their dough two or three times a week, Round Table rolls out its fresh crust twice a day. Says Ron Mehrens, who owns six Round Table outlets in Southern California: "You can't fool the customer with the level of quality. I know when I pick up my kids at birthday parties and see boxes from Little Caesars, the parents got it because it was cheap."

The pizza wars have squeezed some of the older firms and some of the mom- and-pop places as well. Shakey's Pizza (377 units), which started in 1954 as the first chain of its kind, is trying to diversify by offering a broader menu that includes tacos and pasta. Casa Luna, a family-owned pizzeria in Chicago, thrives by offering videocassette rentals on the premises. Even if the movie a customer wants is not available, says Co-Owner Bob Proskin, "they still order the pizza."

Ever searching for an advantage, the pizza chains have put their laboratories to work on new products. Pizza Hut is pushing the limits of prefabrication with Personal Pan Pizzas, which are assembled in advance to be popped into the oven for customers. Godfather's offers a stuffed pizza with the toppings placed between two crusts. Opinions differ as to the next big seller. Declares Michael Ilitch, founder of Little Caesars: "The main emphasis will be on the dough, a very light and very crunchy crust." Godfather's Henderson, though, thinks prompt delivery is still the main battlefront. Which ever chain wins the war, the tastiest prospects are the consumer's.