Applebee’s changes its playbook on deals after sales slump a staggering six percent

Applebee’s has made a big confession: Its famous $1 margaritas and 50-cent wings are no longer enough to bring in customers.

Sales for the three months to the end of September fell by six percent compared to the same period before, parent company Dine Brands said last week.

It means the chain’s sales have now fallen for six consecutive quarters, dating back to early 2023.

Bosses admitted that the old “playbook” of rotating, low-cost specials doesn’t work in today’s market, where diners want value for full meals, not just select items.

Instead, they say the chain plans to roll out a more consistent value offering.

Applebee’s is the first to introduce the Real Big Meal Deal this week, where you can choose from an appetizer and a drink at an affordable price.

The Real Big Meal Deal has not been given an official end date, but bosses said it will last longer than a usual limited-time offer. Prices will be announced this week.

The change comes as other chains such as Chili’s, McDonald’s and Popeyes introduce similar value-oriented meals to lure inflation-weary diners.

Experts say this move could be critical to Applebee’s recovery in an increasingly difficult economic climate.

“What many customers want is an everyday low price on meals,” retail expert Neil Saunders of Global Data told Daily Mail.com.

“Consumers are fed up with constant inflation and are increasingly looking for better value for their money and Applebee’s is responding with its new value meal.”

“The previous strategy of constantly changing deals didn’t work because consumers never knew what the price of the meal would be and what would be offered,” he explained.

‘This new strategy is much clearer.’

However, other experts cautioned that promotional deals aren’t necessarily always the answer for struggling chains.

“The failure or success of these types of promotions can have significant financial consequences for a business,” Sarah Foss, chief legal officer at Debtwire, told Daily Mail.com.

“As we all remember, the failure of Red Lobster’s ‘Endless Shrimp’ promotion ultimately cost the company $11 million.”

Red Lobster had several unwise operational decisions that were among the causes of their bankruptcy. The most notable of which was making the limited-time $20 Unlimited Endless Shrimp all-you-can-eat promotion permanent.

Applebee’s announced the plan and reported disappointing third-quarter results on Wednesday.

“The guest definition and expectation of value has changed in recent quarters,” Dine CEO John Peyton told analysts on the earnings call.

“They started focusing on the total cost of the meal. And while Applebee’s and IHOP focused primarily on promoting one part of the menu or menu item, it became clear that guests want to know the total cost of dining at a restaurant… the cost of your sandwich, plus fries and drink,” he explained. .

Applebee’s is joining Chilis and other rivals in offering value meals to win back customers hurt by inflation.

Earlier this year, Chili’s introduced its “3 for Me” meal with a side dish such as fries or mashed potatoes and a drink for just $10.99.

Popeyes also introduced a value meal in September, offering three pieces of chicken on the bone for $5.

Applebee’s is known for its large burgers and fries

The causal dining chain also offers ‘dollaritas’ as part of its limited offering

The value wars emerged earlier this summer when McDonald’s announced its $5 meal deal, which includes a McChicken or McDouble, four-piece chicken nuggets, fries and a drink.

Rival Burger King’s $5 Your Way Meal offers the choice of one of three sandwiches – a Whopper Jr, a Bacon Cheeseburger or Chicken Jr – plus four chicken nuggets, fries and a soft drink.

Wendy’s currently has a $3 breakfast deal and also a $5 four-item meal, similar to McDonald’s and Burger King’s.