Applebee’s Is Lone Casual Dining Grower on FT Top 200+
Dollar drink deals helped Applebee's drive traffic in 2018 and the brand is continuing the "Neighborhood Drink of the Month" promotion, with the $1 Vampire rum drink as the latest iteration.
When two of the supposed top three brands in a segment actually saw sales decline, you know there’s a problem. Though it actually recovered slightly from 2017’s 3 percent drop, the casual dining subcategory of restaurants in the Franchise Times Top 200+ is still going in the wrong direction, save for Applebee’s, the only brand to see positive sales growth in 2018 with a 2.3 percent increase. The Top 200+ casual dining brands overall had $14.4 billion in systemwide sales in 2018, down 0.9 percent from 2017.
“We’re getting back to our core guest and remembering that value is very important to our guest,” said John Cywinski, Applebee’s president, as he noted “Neighborhood Drink of the Month” deals have helped drive traffic and, “95 percent order food along with it.” The chain’s off-premises business, including to-go and delivery, increased by more than 30 percent in 2018. “We’ve reestablished Applebee’s as a category leader and it reinvigorated the brand,” said Cywinski.
Cywinski rejoined Applebee’s in 2017 and previously spent five years as the brand’s chief marketing officer from 2001 through 2006. When he came back, Cywinski said he saw “the brand fundamentals were sound,” but Applebee’s needed to focus on “getting back to our core guest and our core essence.” That meant a focus on value.
Applebee’s has returned to inexpensive and familiar food, recurring meal offers such as the popular 2 for $20 and an embracement of cheap drink deals that’s evolved from the $1 “Dollarita” margaritas to the aforementioned “Neighborhood Drink of the Month.” It also reintroduced popular items such as riblets, pastas and fajitas.
The brand also “tightened the variability from an operation standpoint,” said Cywinski, meaning it focused intensely on providing the same guest experience at every restaurant. As a result Applebee’s “achieved an all-time high in guest satisfaction and value for the money” scores on a recent survey, he noted.
Off-premises sales presented another opportunity. “We set out to activate delivery in our space and to win,” said Cywinski. The brand now works with several third-party delivery providers and continued to see to-go orders increase last year.
“We were very successful in 2018 with to-go and I can now say with confidence we are very well positioned with delivery,” said Cywinski.
Applebee’s franchisees also agreed in 2018 to increase their advertising contribution rate to 4.25 percent. “They believe in our plan and they’re willing to put their money behind it,” said Cywinski as he noted a ramp up in national television advertising that’s also featured familiar songs to go along with the familiar food. “Make ‘em hungry and make ‘em smile,” is the goal, he said.
Unit closures have also been part of the formula as Applebee’s shuttered underperforming restaurants. The brand’s unit count drop by 99 in 2018. “We really optimized the Applebee’s portfolio,” said Cywinski.
At the other end of the casual dining spectrum, TGI Fridays’ sales dropped by 7.8 percent, or $200 million, as it fell eight spots in the ranking to No. 60. Sales at Chili’s, Sizzler, Red Robin and Steak ‘n Shake also all took a hit in 2018.
Search the Top 200+ database and see category breakdowns at FranchiseTimes.com/Top200-2019.