What is in this article?:
- Applebeeâ€™s parent sets traffic-driving strategies
- Making Applebee's more relevant
Traffic declines at the chain during the second quarter while momentum continues at sister brand IHOP.
Applebee’s parent DineEquity Inc. is working on strategies to drive traffic by targeting specific consumers and the emotional connection they have with the casual-dining brand, the company said after reporting second-quarter results on Tuesday.
At sister brand IHOP, revitalization efforts are continuing to drive momentum.
The family-dining chain recorded a domestic systemwide same-store sales increase of 3.2 percent for the June 30-ended quarter, which the company said reflected positive sales across all dayparts.
It was the fifth consecutive quarter of same-store sales increases for the 1,625-unit family-dining chain following a redesign of the menu last year that prompted guests to buy more appetizers and higher-priced dishes. The chain also tweaked its advertising and operational execution to enhance the overall value proposition.
As a result, DineEquity upgraded its outlook for IHOP, saying same-store sales for the year will likely increase between 1 percent and 2.5 percent. Previously, the company expected IHOP’s same-store sales would rise between 0.5 percent and 2 percent for the year.
Domestic same-store sales for Applebee’s Neighborhood Grill & Bar, however, rose a more modest 0.6 percent, which largely reflected an increase in average check that offset a “slight” decline in traffic, said Julia Stewart, DineEquity’s chair and chief executive.
The chain’s positive sales outperformed the casual-dining industry as a whole, which has struggled with negative sales for years. But Stewart said, “We have more to do to restore consistent and sustainable positive performance.”
Driving consistent increases in traffic remains a priority, and the company continues to work on strategies to “push the reset button,” she said.
After conducting in-depth research on Applebee’s’ target audience, Stewart said the company has been working on key strategies, including improving in-restaurant speed, defining daypart strategies for growth, building guest loyalty and “defining the Applebee’s of the future to adapt to the new marketplace,” Stewart said.
The research has given company officials a better picture of how to target specific consumers, not necessarily by income levels or demographics, but by what they think about restaurants and casual dining in general, said Stewart.
“It’s less about age and generational. It’s more about an emotional attune to how they think about restaurants and casual dining and us, in particular, and what it will take to get them to come more often,” said Stewart. “They’re very clear about what they want us to do differently, and we have to find our sweet spot, especially in competing against fast casual.”