Owner of Applebee's and IHOP Dining brands She believes her deals could appeal to fast-food customers who are frustrated by menu prices.
The company reported first-quarter earnings that fell short of Wall Street estimates, and both Applebee's and IHOP's same-store sales contracted more than expected. However, Dyne reiterated its full-year outlook and said sales improved sequentially. The company's shares rose less than 1% in afternoon trading on Wednesday.
As Applebee's leans into value with a slate of promotions that include the return of Dollaritas, Dine Brands CEO John Peyton is confident the chain can take on fast-food chains vying for its customers.
“The Whole Lotta Burger for $9.99 — if you can get a burger for $10, and it's great quality and is in plentiful supply and can be eaten at our restaurant, in our experience, why would you eat a $10 burger out of a paper bag in your car?” He told CNBC.
As consumers pull back on their restaurant spending, Applebee's and IHOP are competing against a larger pool of competitors than usual for a smaller pool of customers. Full-service restaurants, fast food chains and even in-home dining are all competing for diners' dollars, Peyton said.
According to Peyton, lower-income consumers hesitated less and spent more carefully when dining out in the first quarter. Consumers with incomes of less than $50,000 represent about 40% to 50% of Dyne's customers, he said.
Applebee's isn't the only casual dining chain it's targeting McDonald's And the rest of the fast food category. Chili's, which you own Brinker Internationalrecently launched an advertising campaign calling out Big Macs and other fast-food burgers for their prices.
McDonald's is certainly feeling the heat. “Everyone has a value message,” CEO Chris Kempczinski told analysts on the company's latest earnings call, which is why the chain is looking to build a nationwide value menu.
Besides a penchant for deals, Applebee's may also get an edge on the competition with three recent pop culture moments: a pivotal appearance in the tennis drama “Challengers,” an Applebee's-driven meltdown on “Survivor” and a booing. From football legend Peyton Manning as Netflix roasts his former rival Tom Brady.
Not since Beyoncé coined the name Red Lobster in her hit song “Formation” has a fast-casual restaurant chain found much relevance in popular culture.
“It's something that's top of mind for a lot of people because they grew up with Applebee's,” Peyton said.
