One of the most infamous menu items in the pizza industry is getting a price increase that could impact the marketing and name of the item.
What Happened: Little Caesars launched the $5 Hot-N-Ready concept in 1997, according to the Detroit Free Press. The item centered on convenience and price.
The pizza company announced Monday the new price point on the Hot-N-Ready will be $5.55 nationally, an 11% increase over the famous price point.
Little Caesars said the Hot-N-Ready will be "new and improved" with 33% more pepperoni.
Taking a shot at its rivals Domino’s Pizza Inc (NYSE:DPZ) and Pizza Hut, a Yum Brands (NYSE:YUM) company, Little Caesars said the new price point is still cheaper than similar $13 to $16 pizzas at those chains.
Several regions across the country saw the $5.55 price point last year, with other markets seeing the new price this week.
"Change is good when it comes to giving our customers more of what they love," said Jeff Klein, chief marketing officer at Little Caesars.
Related Link: This Pizza Stock Has Better 10 Year Return Than Apple, Netflix And Microsoft
Why It’s Important: Many restaurants raise prices every couple years to combat rising food costs and employee wages. These changes usually go unnoticed by the public as most customers don't remember exact price points of menu items.
Little Caesars created strong brand awareness with the $5 Hot-N-Ready, but now faces the flipside dilemma of being associated for one price and not being able to change it without the public noticing.
Another brand that faces this dilemma is Subway, which has utilized a marketing campaign of the $5 footlong, which has led to backlash from franchise owners as the profit margins have shrank on the item over the years.
Domino’s and Papa John’s International (NASDAQ:PZZA) have seen shares increase 1,696% and 608%, respectively, over the last 10 years as sales of pizzas continue to rise.
Little Caesars, which is headquartered in Detroit, is the third largest pizza chain in the world.
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