Applebee’s abandons millennials strategy

Applebee’s says it’s made a mistake: It’s been trying too hard to be cool.

After years of working to brand itself as a modern millennial hangout, the family-friendly chain is reversing course. It’s bringing back all-you-can-eat specials and doubling down on such discounts as its Two for Twenty Menu. The chain’s parent company, Dine Equity, is also bringing on a new chief executive and closing up to 160 Applebee’s and IHOP locations in a bid to boost profits.

“Over the past few years, the brand’s set out to reinvent Applebee’s as a modern bar and grill in overt pursuit of a more youthful and affluent demographic,” John Cywinski, president of Applebee’s said in a call with analysts last week.

Those efforts, he said, included “a clear pendulum swing toward millennials.”

But that turned out to be a bad idea. Longtime regulars balked at new menu items and modern decor, said Patrick Lenow, a spokesperson for Dine Equity.

“I think, in retrospect, we may have tried too hard to attract new guests,” he said. “That left some of our fans shaking their heads, asking ‘What happened to Applebee’s?’”

Now the company is taking items off the menu, including a turkey sandwich with sriracha chili lime sauce and a pork-hambacon sandwich. And it is bringing back old favourites.

Applebee’s is also assessing “whether the brand truly gets credit for hand-cutting steaks in the restaurant and whether we should continue with this approach,” Cywinski said.

Analysts said these changes are part of a broader turnaround effort at Dine Equity’s 3,700 locations, all of which are franchised. Even IHOP, which has traditionally been a source of stability for the company, has seen sales slip in recent quarters.

In all, Glendale, Calif.-based Dine Equity plans to close up to 135 Applebee’s restaurants and about 25 IHOP locations. (It will offset some of those closures with the addition of up to 30 IHOP and 95 Applebee’s franchises.)

Executives said they had yet to determine which locations would be closed, but added that they plan to focus on older ones and “under performing — and perhaps even brand-damaging — restaurants.”