Applebee’s wants to win over McDonald’s, Shake Shake and Wendy’s customers with deals including a bargain burger.
John Peyton, CEO of Dine Brands — which owns Applebee’s and IHOP — said these types of restaurants and fast-food chains are in direct competition with each other.
In an effort to lure Americans tired of rising fast food prices, he said Applebee’s has the “Whole Lotta Burger” with fries for $9.99. It has bacon, cheese, lettuce, tomatoes and pickles.
The move to compete with fast-food chains mirrors that of Chilli’s. This week it unveiled its new ‘Big Smasher’ – a larger version of the Big Mac – that comes with fries and a drink for under $10.
‘The Whole Lotta Burger for $9.99 – if you can get our burger for $10, which is great quality, plentiful and can be eaten in our restaurant, why would you, in our experience, want a $10 burger? 10 out of a paper bag in your car?’ John Peyton, the CEO of Applebee’s parent company Dine Brands, told CNBC on Wednesday.
Applebee’s Whole Lotta Burger with fries for $9.99
Applebee’s launches a new cheap burger to compete with McDonalds
A Big Mac meal often costs more than $13
A Big Mac meal can cost almost $15, while Shake Shake, Five Guys and Wendy’s have burgers that cost $10 alone.
Applebee’s is known for offering value for money, but has seen a 4.6 percent drop in sales in the first quarter of the year as customers balk at price.
Dine Brands is expected to lean further on value as it reported a sales decline at its restaurants, including 1.7 percent at IHOP in an earnings call on Wednesday.
Lower-income consumers, who make up between 40 and 50 percent of the company’s customers, were less likely to visit and exchange the items they ordered, Payton explained.
Chili’s has also tried to rival McDonald’s with the launch of its new ‘Big Smasher’ burger.
The Texas restaurant chain launched the Big Smasher in late April in an effort to offer a cheaper and heavier alternative to its fast-food competitors who have raised prices.
A Big Mac Meal in Branford, Connecticut, costs $14.69, according to the McDonald’s app.
At a nearby Chilli’s in East Haven, a Big Smasher — with fries, a drink and an entree — costs $10.99 as part of the “3 for Me” meal.
“We have always had delicious burgers on our menu, but in the past year or so we have been hearing more and more frustrations from fast food fans about rising costs,” Paquette says. told Business Insider.
“We believe Chili’s 3 for Me offers more value than you’ll find at a drive-thru and with the all-new Big Smasher burger, we’ve made the ‘3 for Me’ even better” George Felix, Chili’s Chief Marketing Officer officer added.
“We believe our guests can enjoy better quality, better prices and a better experience every time,” Felix added.
The Big Mac and Big Smasher both contain onions, pickles, shredded lettuce, American cheese and Thousand Island-style dressing. The only difference is that the Big Smasher doesn’t have the extra piece of bun in the middle.
Chili’s launched its Big Smasher burger in April as a competitor to McDonald’s Big Mac
Chili’s is aware that fast food customers are becoming increasingly frustrated by price increases
Fast food prices have risen, with McDonald’s increasing their prices by around 10 percent in 2022 and 2023
The similarity is something that Chili’s does not shy away from, writing in a press release that the new burger has “flavors that fast food lovers will recognize.”
Ads for the new burger claim it’s better than ‘a small drive-thru burger’ as they show off their ‘3 For Me’ meal alongside a Big Mac.
Due to inflationary price increases and customer dissatisfaction, chains have increasingly turned to promotional offers such as Chili’s 3 for Me to entice customers.
Applebee’s ‘2 for $25’ deal offers customers two entrees and the choice of an appetizer or two salads.
Similarly, Red Lobster’s ‘Shrimp Your Way’ meal deal includes three shrimp dishes for $25 or two for $21.