Of note, Applebee’s has posted sequential improvement in each of the past four quarters, giving it year-to-date comp sales of 5.5 percent. Cywinski said it was also important to point out that the majority of this sustained growth has come in the form of traffic.
Put simply: “This organic growth reflects the enhanced relevance, appeal, and health of the Applebee's brand,” he said.
The narrative around how Applebee’s rerouted its sliding business hasn’t been overly complex, and it’s been a consistent message throughout the last year.
“From a strategic perspective, Applebee's has returned to its roots. We have embraced our core DNA as the neighborhood place folks come to connect with family and friends, and we remain fixated on restaurant-level excellence and guest satisfaction is our top priority,” Cywinski said.
Back to its roots, but planting new ones, too
Sure, Applebee’s lost sight of its core guest. That misdirection proved nearly catastrophic, as you can see from the prior sales trends. But beyond the return to value (monthly drink deals and offers like the 3-course meal for $11 introduced in September) and focus on improved unit-level economics and franchisee profitability, Applebee’s has started to wield its significant leverage in some of the industry’s quickest-moving categories. This is why Joyce said there was “untapped potential” when he joined the company.
One of the biggest indicators is off-premises. Despite the headlines that Applebee’s was stodgy and outdated in its customer base, the brand discovered through analytics that millennials actually represent the largest segment of its diners at 30 percent—a significant over-index relative to casual dining as a whole, Cywinski said.
With Scott Gladstone, vice president of strategy, at the controls, Applebee’s boomed its off-premises business in the past calendar year. This quarter alone, it grew 37 percent, and now accounts for about 10 percent of the total sales mix.
The vast majority of the off-premises lift is credited to carryout and to-go orders. However, that might soon change. Applebee’s plans to offer delivery in nearly 1,000 restaurants by year’s end. With DoorDash as a national partner, Applebee’s is currently offering the service in about 500 restaurants. The catering business is also emerging.