Applebee's CEO slams reports that millennials are killing the chain as 'false news'

Applebee's

Applebee's is drawing millennials in with promotions like $1 margaritas.

• The CEO of Applebee's and IHOP called the "death of casual, family dining" coming at the hands of millennials "false news."
• The executive, Stephen Joyce, said to Business Insider that Applebee's made some major missteps in trying to win over younger customers.
• "I think millennials have better bulls--- meters than we did growing up," Joyce said.

The CEO of Dine Brands - which owns Applebee's and IHOP - is tired of reports that millennials are killing sit-down, casual, and family dining chains.

"I'd like to put to rest false news about the death of casual family dining and the abandonment by millennials of the categories," Stephen Joyce said at the beginning of the company's earnings call last week. Dine Brands reported that Applebee's grew sales in the US by 3.3%, driven primarily by increased traffic, in the most recent quarter.

Applebee's has struggled to grow sales in recent years and closed 99 locations in 2017. Business Insider has closely covered the struggles casual-dining chains have faced over the last year, with headlines such as "Millennials are killing chains like Buffalo Wild Wings and Applebee's."

Earlier this week, Business Insider sat down with Joyce and talked more about the rumored death of casual dining - and settled the question of millennials' murder spree once and for all.

Are millennials killing Applebee's?

Zhora Sirota/KB Strelka/Flickr

Are millennials to blame for Applebee's problems?

Applebee's problems, Joyce told Business Insider, hasn't necessarily been millennials. But, he admitted that they played a role in recent struggles.

According to Joyce, the chain has failed to research what customers across the board actually want from a restaurant. In an effort to appeal to what executives thought millennials wanted, the chain distanced itself from what Applebee's is actually known for.

"You cannot manufacture yourself and be a politician," Joyce said. "You can't say I'm an Epicurean delight and I'm comfort food. I think millennials have better bulls--- meters than we did growing up."

Some of Applebee's ads weren't getting by the bulls--- meter. One commercial that Applebee's tested, as remembered by Joyce, showed young, beautiful millennials laughing while dining on small plates at the restaurant.

"Everyone was like, good ads!" Joyce said. "I raised my hand and said, 'I know none of you guys eat at Applebee's.' … I go, 'You put 30 pounds on those people and make them look like they had one too many last night - that's who goes to Applebee's.'"

Now, Applebee's has a different tactic to win over millennials - and it mostly involves treating them like any other customer. As they grow families of their own, millennials are being drawn in by value and convenience, with Applebee's adding options such as take-away and delivery.

"As the millennials age, they begin to act more like their parents," Joyce said.

However, Applebee's is using another tactic to win over younger millennials. Bar promotions, such as the Dollarita, and limited-time offerings like Riblets are intended to spark interest - and they're working.

"When it first started, we were looking at social media and millennials were like, 'I don't like Applebee's. But dollar margaritas? I'm in,'" Joyce said.

At first, others at Applebee's were worried by the negativity. Joyce took an opposite approach, telling executives to use the $1 drinks to "get 'em in" and convince millennials to reconsider Applebee's.

Is casual dining dying?

Associated Press

So, Applebee's may have won over more younger customers in recent months. But, what about the death of casual dining?

"There are too many restaurants," Joyce said. "There's no question."

The problem, he says, isn't a casual-dining problem. It's a problem of every chain disappearing into a sea of sameness.

Casual-dining chains were hit hardest, but if they differentiate themselves from the competition, Joyce says a turnaround is possible. However, while Applebee's is on the up-and-up, the same can't be said for every chain.

"We're doing a lot better than everybody else in the category," Joyce said. "That means we're taking it from somebody."