DineEquity Inc. Developing Strategies To Drive Traffic
By Christine Kern, contributing writer
Dine Equity Redesigns traffic-driving strategies for Applebee’s and IHOP
The Nation’s Restaurant News reports that DineEquity Inc. is working on strategies to drive traffic by targeting specific consumers and the emotional connection they have with Applebee’s, the company said after reporting second-quarter results. At sister brand IHOP, revitalization efforts are continuing to drive momentum. The family-dining chain recorded a domestic system-wide same-store sales increase of 3.2 percent for the June 30-ended quarter, which the company said reflected positive sales across all day parts. The results for this quarter proved to be the fifth consecutive quarter with same-store sales increases following the revamping of the chains’ menus that aimed to entice guests to order more appetizers and higher priced main dishes. While IHOP’s performance has caused the company to upgrade its outlook for the chain, Applebee’s performance has been a bit more sluggish.
In May, Julia Stewart, DineEquity’s chair and chief executive, said the company will specifically focus on being “bolder than ever” this year about differentiating Applebee’s, which was acquired in 2007 for about $2 billion. Over the past five years, DineEquity has completed the refranchising of about 475 restaurants, recreating Applebee’s as an almost entirely franchised chain. The company also launched a comprehensive remodel program, and 95 percent of the chain’s restaurants will sport the new look by the end of 2014.
Still, Stewart said 2,011-unit Applebee’s needs work. “We have the largest casual-dining brand in the U.S., and we have to continue to evolve,” she said
The company’s main objective is still to consistently drive traffic and have overall positive performances. After engaging in an extensive research study on Applebee’s target audience, the company has been developing strategies for increasing speed, growth, and guest loyalty. The research differentiates consumers by their opinions on casual dining in general rather than by more socioeconomic indicators such as income levels or other demographics.
Julia Stewart. DineEquity Inc. chair and chief executive states that, “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…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.”
Using this research, DineEquity Inc is developing a loyalist program for Applebee’s and sister company IHOP in order to satisfy the customers desire to have a more customizable experience. They are also addressing the bar business, where customers have expressed that a more ‘relevant’ and ‘contemporary’ business would be appreciated.