For DineEquity CEO Julia Stewart, changing the brand loyalty story at Applebee’s is a major priority for 2016.
During Wednesday’s fourth-quarter conference call for DineEquity−which owns and operates IHOP and Applebee’s restaurants−Stewart noted that IHOP finished the year on a strong note, posting a 4.5% increase in comp sales, up from a solid 3.9% increase last year.
Although Applebee’s full-year comp sales were slightly positive and in line with company full-year guidance, “the results were not where we want them to be,” Stewart explained, according to Seeking Alpha. “We have a plan in place to drive the performance we expect from both of our brands as leaders in their respective categories. I mentioned last quarter that, after careful analysis, it’s clear that the work we’ve done to date on Applebee’s has not been enough. To address this and remain ahead of the competition, we must move faster, be bolder, and think outside the box. We have a new approach focused on achieving excellence in select initiatives, rather than working on too many simultaneously. Starting with the first benchmark, we’re going to change the story at Applebee’s.”
Stewart offered two observations related to the performance of Applebee’s.
“First, the casual dining segment continues to be quite challenging as consumers’ discretionary dollars find their way to fast casual and quick service concepts,” she said. “And although 2016 has started slowly for the industry, I am confident that the plan we’re collaborating on with our franchisees will build success throughout the year. Second, Applebee’s has clearly not done enough to differentiate itself and punch through this noisy, cluttered market. As the consistent leader in casual dining, we can’t wait for trends to become more favorable. We have to do the heavy lifting ourselves.”
What’s more, Stewart said the company is executing a strategy intended to “give guests compelling reasons to rethink the brand and visit more often, while enticing those that have not been to an Applebee’s to see what’s new at their neighborhood destination.”
DineEquity is in the midst of a systemwide effort to upgrade restaurant operations and better train team members, both back of the house and front of the house, as part of a renewed commitment to the guest experience, Stewart noted.
“We’re streamlining our menu to make it easier for the kitchen to turn out consistently great food and to focus on what guests love most,” she said. “And we’re building a pipeline of innovative menu offerings, beginning with a new platform this spring that will be the centerpiece of our strategy. We’re finalizing plans for remodels and new prototypes that will contemporize existing restaurants and facilitate expansion into both traditional and nontraditional venues. And we’re creating a new marketing and advertising campaign that will embrace the heritage of the Applebee’s brand, a Neighborhood Grill & Bar, in ways that are relevant and appealing to today’s consumer lifestyle. We expect that our initiatives will begin to gain traction in the back half of 2016. I’d like to thank you for your patience. I understand it’s a tale of two halves, but we have a very aggressive plan that our franchisees have bought into and they are willing to significantly invest in their future growth.”