Dine Brands, the owner of Applebee’s and IHOP, is focused on luring fast-food customers frustrated with rising menu prices. With consumers spending less on dining out, the two chains face stiff competition from fast-food restaurants, other full-service dining options, and eating at home. To stand out, Applebee’s has launched various promotions, including the return of the popular Dollaritas, to attract customers away from fast-food chains. Dine Brands CEO John Peyton is confident that offering quality meals at affordable prices will sway customers towards dining in at Applebee’s.
Low-income consumers make up a substantial portion of Dine’s customer base, with those earning less than $50,000 accounting for 40-50% of their clientele. In the first quarter, these customers visited less frequently and spent carefully when dining out. Despite reporting earnings that fell short of expectations, Dine remains optimistic about its full-year outlook and has seen an improvement in sales sequentially. This optimism has translated into a slight increase in the company’s stock price.
Applebee’s is not the only casual dining chain targeting fast-food giants like McDonald’s in an effort to capture market share. Chili’s, owned by Brinker International, has also launched deals to compete with the likes of McDonald’s. McDonald’s acknowledges the competitive landscape, with CEO Chris Kempczinski noting the prevalence of value messages among restaurants. The chain is working on creating a nationwide value menu to stay ahead in the market.
In addition to offering value promotions, Applebee’s has benefited from recent pop-culture moments that have kept the brand relevant. From a cameo in a tennis drama film to mentions on popular reality TV shows and a shoutout from football legend Peyton Manning, the chain has found itself in the spotlight. This exposure, combined with customers’ fond memories of dining at Applebee’s, has helped the chain stay top of mind for many consumers.
With a focus on appealing to cost-conscious consumers and leveraging pop culture moments to stay relevant, Applebee’s and IHOP are determined to compete in a challenging industry. By offering quality meals at affordable prices and creating engaging promotions, Dine Brands aims to attract customers away from fast-food chains and other dining options. Despite facing headwinds in the market, the company is optimistic about its future growth and remains committed to driving sales and improving customer loyalty.
