In the current economic climate, where consumers are becoming more cautious with their spending, restaurants like Applebee’s and IHOP are facing stiff competition from a variety of dining options. The CEO of Dine Brands, John Peyton, acknowledges that full-service restaurants, fast–food chains, and even eating at home are all vying for the attention of diners. In an effort to stay ahead of the competition, Applebee’s is focusing on providing value to its customers through various promotions, such as bringing back its popular Dollaritas.
One of the key strategies that Applebee’s is employing to lure customers away from fast-food chains is its emphasis on value. With offerings like the “Whole Lotta Burger” for $9.99, the restaurant is confident that it can provide customers with a high-quality dining experience at an affordable price. Peyton highlights the fact that for the same amount of money, customers can enjoy a quality burger in a comfortable restaurant setting, rather than opting for a fast-food alternative.
According to Peyton, low-income consumers have been visiting restaurants less frequently and spending more carefully. Dine Brands’ customer base includes a significant portion of individuals with incomes under $50,000, making up around 40% to 50% of their clientele. This demographic shift in consumer behavior has impacted the company’s first-quarter earnings, with both Applebee’s and IHOP reporting lower same-store sales than expected.
Applebee’s isn’t the only casual dining chain that is looking to compete with fast-food giants like McDonald’s. Chili’s, another well-known restaurant owned by Brinker International, has recently launched an ad campaign targeting fast-food burger prices. Even McDonald’s has acknowledged the pressure it is facing from competitors, with CEO Chris Kempczinski highlighting the need for a nationwide value menu to attract customers.
In addition to offering value deals, Applebee’s is leveraging recent pop-culture moments to stay relevant and appeal to a wider audience. The restaurant’s cameo in the tennis drama film “Challengers,” a viral meltdown on “Survivor” inspired by Applebee’s, and a shoutout from football icon Peyton Manning during a Netflix roast have all contributed to the chain’s increased visibility in popular culture. This level of exposure rivals that of Red Lobster when Beyonce referenced the chain in her hit song “Formation.”
Applebee’s and IHOP are facing fierce competition from fast-food chains and other dining options. By focusing on value, targeting low-income consumers, and leveraging pop-culture moments, these restaurants are looking to attract and retain customers in an increasingly crowded marketplace. The battle for customers’ dollars continues, but with the right strategies and promotions, Applebee’s and IHOP are positioning themselves as strong contenders in the value game.