Applebee’s owner Dine Brands wants to steal fast-food customers with its deals

Applebee’s
and
IHOP
owner


Dine
Brands
thinks
its
deals
can
lure
away
fast-food
customers
who
have
grown
frustrated
with
menu
prices.

As

consumers
pull
back
their
restaurant
spending,
Applebee’s
and
IHOP
are
fighting
against
a
larger
group
of
rivals
than
usual
for
a
smaller
pool
of
customers.
Dine
Brands
CEO
John
Peyton
said
full-service
restaurants,
fast-food
chains
and
even
eating
at
home
are
all
competing
for
diners’
dollars.

To
rise
above
the
competition,
Applebee’s
has
been
leaning
into
value
with
a
slate
of
promotions
that
includes
the
return
of
Dollaritas,
which
makes
Peyton
confident
that
it
can
beat
out
the
fast-food
chains
vying
for
its
customers.

“The
Whole
Lotta
Burger
for
$9.99
—
if
you
can
have
our
burger
for
$10,
which
is
great
quality,
abundant
and
eat
in
our
restaurant,
in
our
experience,
why
would
you
eat
a
$10
burger
out
of
a
paper
bag
in
your
car?”
he
told
CNBC.

Low-income
consumers
visited
less
frequently
and
spent
more
carefully
when
they
did
eat
out
in
the
first
quarter,
according
to
Peyton.
Consumers
with
incomes
under
$50,000
account
for
about
40%
to
50%
of
Dine’s
customers,
he
said.

Dine
Brands
reported
first-quarter

earnings
that
fell
short
of
Wall
Street’s
estimates,
and
both
Applebee’s
and
IHOP’s

same-store
sales
shrank
more
than
expected.
Still,
Dine
reiterated
its
full-year
outlook
and
said
sales
have
improved
sequentially.
Shares
of
the
company
closed
roughly
flat.

But
it’s
too
soon
to
tell
if
Dine
will
succeed
in
winning
over
diners
—
and
investors.
The
company
will
need
to
improve
its
same-store
sales
significantly
to
meet
the
full-year
outlook
it
reiterated
this
quarter,
Raymond
James
analyst
Brian
Vaccaro
wrote
in
a
research
note
on
Wednesday.
Dine
is
projecting
same-store
sales
growth
will
range
from
flat
to
2%
this
year;
in
the
first
quarter,
they
fell
4.6%
at
Applebee’s
and
1.7%
at
IHOP.

Applebee’s
isn’t
the
only
casual
dining
chain
aiming
at


McDonald’s
and
the
rest
of
the
fast-food
category.
Chili’s,
which
is
owned
by


Brinker
International,
recently
rolled
out
an
ad
campaign
that
calls
out
the
Big
Mac
and
other
fast-food
burgers
for
their
prices.

And
McDonald’s
is
certainly
feeling
the
heat.
CEO

Chris
Kempczinski
told
analysts
on
the
company’s
latest
earnings
call
that “everybody’s
out
there
with
a
value
message,”
which
is
why
the
chain
is
looking
to
create
a
nationwide
value
menu.

Besides
leaning
into
deals,
Applebee’s
might
also
get
an
edge
on
the
competition
from
a
triad
of
recent
pop-culture
moments:
a
pivotal
cameo
in
the
tennis
drama
film “Challengers,”
an
Applebee’s-motivated
meltdown
on “Survivor”
and
a
shoutout
from
football
legend
Peyton
Manning
during
Netflix’s
roast
of
his
former
rival
Tom
Brady.

Not
since
Beyonce
name-dropped
Red
Lobster
on
her
hit
song “Formation”
has
a
casual-dining
chain
felt
so
relevant
in
pop
culture.

“It’s
top
of
mind
for
so
many
people,
and
it’s
because
they’ve
grown
up
with
Applebee’s,”
Peyton
said.