Applebee's Gives Up On Millennials After Failed Rebranding Efforts

Aug 15, 2017
Originally published on August 16, 2017 7:35 am

Applebee's announced this month that more than 130 of its restaurants will close by the end of the year.

The casual dining chain rebranded itself in the past few years as a modern bar and grill.

Applebee's executive John Cywinski recently told investors that the company had hoped the effort would attract a new kind of customer.

The chain aimed to lure "a more youthful and affluent demographic with a more independent or even sophisticated dining mindset, including a clear pendulum swing towards millennials," he said.

Applebee's wanted to lure millennials with dishes like barbecue shrimp in a sriracha-lime sauce; chicken wonton tacos; and a pork, ham and bacon sandwich.

But that triple pork bonanza — and the rest of the company's makeover — didn't seem to catch on with customers. Sales at Applebee's dropped more than 6 percent from last year.

"From my perspective, this pursuit led to decisions that created confusion among core guests as Applebee's intentionally drifted from its ... middle-America roots and its abundant value positioning," Cywinski said.

In other words, millennials didn't go for it, and the regulars got turned off. In fact, Applebee's isn't the only big restaurant chain struggling.

"You see very weak results from people like Ruby Tuesday's, Friday's and Chili's as well," says Joe Pawlak of Technomic, a food service research firm. "Consumers are saying that all these people are offering the same food items, the decors are the same, and also that prices have become very high in these places."

So it may be time for yet another transformation for Applebee's, if it really wants to stand out in the crowd.

Applebee's has taken the first step. The chain announced a return to all-you-can-eat specials and an expansion of the popular 2-for-$20 menu.

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ROBERT SIEGEL, HOST:

Applebee's announced this month that more than 130 of its restaurants will close by the end of the year. The reason - millennials.

AUDIE CORNISH, HOST:

The casual dining chain rebranded itself in the past few years as a modern bar and grill. Applebee's executive John Cywinski recently told investors that the company had hoped the effort would attract a new kind of customer.

(SOUNDBITE OF ARCHIVED RECORDING)

JOHN CYWINSKI: A more youthful and affluent demographic with a more independent or even sophisticated dining mindset, including a clear pendulum swing towards millennials.

SIEGEL: Applebee's tried to lure millennials with dishes like barbecue shrimp in a Sriracha lime sauce, chicken wonton tacos and this item.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN: We dare you - yes, you - to try ham topped with pulled pork topped with bacon. Yep, we double-dog dare you to try the triple hog dare you.

CORNISH: That's a pork-ham-bacon sandwich, but that triple pork bonanza and the rest of the company's makeover didn't seem to catch on. Sales at Applebee's dropped more than 6 percent from last year. Applebee's executive John Cywinski again.

(SOUNDBITE OF ARCHIVED RECORDING)

CYWINSKI: From my perspective, this pursuit led to decisions that created confusion among core guests as Applebee's intentionally drifted from its - well, I'll call its middle America rules and its abundant value positioning.

SIEGEL: In other words, millennials didn't go for it and the regulars got turned off. In fact, Applebee's is not the only big restaurant chain struggling.

JOE PAWLAK: You see very weak results from people like Ruby Tuesdays, Fridays and Chili's as well.

CORNISH: That's Joe Pawlak from Technomic, a food service research firm.

PAWLAK: Consumers are saying that all these people are offering the same food items. The decors are the same and also that prices have become very high in these places.

SIEGEL: So it may be time for yet another new look at Applebee's if they really want to stand out in the crowd. Step one, Applebee's has announced a return to all-you-can-eat specials and an expansion of the popular two-for-20 menu. Mozzarella sticks and chili lime chicken, anyone? Transcript provided by NPR, Copyright NPR.