In April, Applebee’s sales mix consisted of 67 percent dine-in, 20 percent Carside To-Go, and 13 percent delivery. The brand's off-premise comparable same-store sales in Q1 increased by 122.7 percent.
Included in that delivery bucket is the brand’s new virtual concept, Cosmic Wings. After about 10 wings in market, Cosmic Wings’ sales averaged about $330 per restaurant, per week, with significant geographic variability reflecting Uber Eats coverage, Cywinski said.
Essentially, there are restaurants generating less than $100 per week, and some pushing sales as high as $2,000. The company will add Postmates delivery this week and then expand to include DoorDash by month’s end.
“After this expansion, I should be able to quantify the size of the Cosmic Wings opportunity,” Cywinski said. “In the meantime, you can use your imagination as to what the addition of DoorDash may mean for the business.”
In March and April, Applebee’s restaurants averaged $54,000 per week. As dine-in came back, off-premises volume maintained between $17,000–$18,000.
“The mix has declined as dine-in has come back, if you look at it on a percentage basis. If you look at it on a dollar basis, it's held steady,” Cywinski said.
What this means and how it unfolds in time, Peyton offered perhaps the best description. “Applebee's and IHOP, one could argue we're not significantly in the off-premise consideration set before the pandemic, and now they are. And we need to keep that,” he said.
Yet the banner target remains dine-in, and that’s only picking up. Applebee’s scaled back media spending in January and February, but now has a sizable national plan balanced throughout the remainder of the year.
The idea was always to keep the powder dry until the message could center on a “welcome back” mantra. And that’s where the brand firmly sits today.
“We want the world to know right now that Applebee’s and IHOP are open for business,” Peyton said. “So our marketing plans encompass national TV, digital media, social media platforms, and one-to-one marketing.”
Inside restaurants, Applebee’s recently integrated handheld tablets in about 500 locations. With staffing challenges across the country, these provide a meaningful hedge against labor inflation while enabling service to be more efficient in taking care of guests, Cywinski said.
“Bottom line, the servers love these tablets because it makes their job easier and allows them to make more money,” he said.
Additionally, in the past year, Applebee’s took a roughly 33 percent reduction in its core menu. It’s led to better margins and execution. “I should also reinforce that over the past year our teams have been quietly focused on building an awesome innovation pipeline of culinary beverage marketing and technology initiatives for future deployment,” Cywinski said.
Dine Brands has faced hiring challenges like the rest of the sector. With demand surging, the company wants to hire 20,000 employees and plans to host national recruiting days on April 17 and April 19, with campaigns behind them. Peyton said they’re doing everything possible to make it easier for people to apply, whether that’s via text, email, and in-person. “And both brands are leverage very creative social campaigns to generate interest,” he said.
Looking ahead, Peyton said Dine Brands is developing and investing in new smaller restaurant prototypes for both brands. Ghost kitchens are in the works, too (IHOP has them in Dubai, Applebee’s in Kuwait). Guests can now request QR code menus and tables aren’t set until guests are seated.
“I've got so much confidence in our future, because I really believe that restaurants are an essential part of society and people want a place to gather and celebrate,” Peyton said. “And after 13 months of being locked in our houses, we Americans are ready to do that.”