Applebee's boneless wings, $1 margaritas a profitable strategy in tough economy: Dine Brands CEO
Crafting promotional deals is both an art and a science, says Dine Brands CEO John Peyton
Dine Brands CEO John Peyton explains how the company has succeeded despite inflationary pressures squeezing diners at popular restaurants like Applebee's and IHOP.
Applebee’s $1 margaritas and boneless wings have proven to be a sweet and satisfying deal for consumers as they chase promotional offers and value, according to Dine Brands CEO John Peyton.
Dine Brands, a parent company that oversees some of the country’s popular eateries, has crafted irresistible promotions that are helping its restaurants navigate the money-conscious consumer in today’s economy.
"The consumer sent a message this past quarter. It was a tough quarter for us, and it was a tough quarter for the restaurant industry overall," Peyton said during an Wednesday appearance on "The Big Money Show."
Applebee’s, IHOP and Fuzzy’s Taco Shop fall under the parent company’s brand.
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"You know what we saw really for our guest that earns $50,000 and below, which is about 40%-45% of our guests, is that that guest dined out less frequently in the first quarter and when they were dining with us, managed their wallet more closely than in the past, finding our promotional offers and things like that," he explained.
Inflation is falling but buying food can still be expensive. Grocery prices surged 21% in the last three years, surpassing the overall 18% pace of inflation during that same time period, according to the Bureau of Labor Statistics.
Peyton said that the company's restaurants have endured strong economies and "tougher economies like this."
"So when you’ve got a menu that’s all about variety, like ours, our strategy is every four to eight weeks… there’s something new to entice guests," he mentioned.
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Applebee’s promotional offers, such as its $0.50 boneless wings, have proven to be successful for the company’s growth.
"That’s a driver of traffic. Most importantly, it’s profitable, like we just launched last week also for Applebee’s, Dollar Rita, which is a margarita for $1, also profitable for our franchisees," he explained.
More restaurants are turning to robot servers in response to the national shortage of food industry workers. This goes back to employees leaving the workforce during the pandemic.
Peyton expressed that constructing a promotional deal is both an art and a science.
"The science is if we know beef is up, we're not going to promote steaks. So, we plan around what we know our cost of goods is. We also plan with our franchisees, and we do postmortems afterwards. And what we learned from one promotion, we roll to the next," he explained.
"So, as long as they're profitable, and they're driving incremental profit and incremental guests, you know, we'll do that, but like I said, every four to six to eight weeks to make sure that we've got something new and exciting to come in."