Applebee's went from being killed by millennial diners to making the biggest comeback in the restaurant business

Applebee's 5Hollis Johnson/Business Insider

  • Applebee's had the restaurant industry's comeback of the year in 2018.
  • US same-store sales were up 5.5% in the first nine months of 2018, after years of slumping sales and dozens of store closures.
  • "I love that line, Jack Nicholson in 'The Shining,' 'We're back!'" Steve Joyce, the CEO of parent company Dine Brands, told Business Insider in November.

2018 was a good year for Applebee's. And, it came after quite a few bad years.

Applebee's sales were plummeting, with dozens of locations closing as the chain struggled to reach millennial diners. Millennials, apparently, were killing Applebee's. The chain was simply not cool, and there was nothing that could be done to fix it.

This year, Applebee's proved that narrative wrong.

To be fair, the comeback began in 2017. Steve Joyce had taken over as CEO of parent company Dine Brands in September. In October, the chain launched the Dollarita, a $1 margarita deal that immediately lifted sales.

But, it wasn't until 2018 that Applebee's proved that the success wasn't a fluke.

Applebee's 2Hollis Johnson/Business Insider

Applebee's US same-store sales were up 5.5% in the first nine months of 2018. The Dollarita kicked off a cheap-drinks revolution at Applebee's, with new $1 to $3 limited-time beverages rolling out every month.

"I love that line, Jack Nicholson in 'The Shining,' 'We're back!'" Joyce told Business Insider in November.

Read more: How the CEO behind Applebee's and IHOP pulled off a shocking turnaround in just a year

The return to growth took a paradigm shift, both internally and outside the company. Joyce says that Dine Brands underwent a cultural shift, with the company reestablishing its credibility with employees. Changes such as readjusting parental-leave policies helped, but so did the early stages of turnaround.

"We had a couple quick wins when people started gaining some confidence - they started to believe," Joyce said. "You can tell there's an attitude that's different in the company if you visit the offices."

Applebee's 11Hollis Johnson/Business Insider

For customers, there was a different cultural shift.

"I think the customer was confused as to what Applebee's was because they heard several different messages over time," Joyce said.

Now the message is back to "eating good in the neighborhood," with inexpensive food that doesn't try to be fancy. The Dollarita kicked off a new paradigm of what customers wanted - homey deals with a side of quirkiness.

Joyce says that the comeback will continue in 2019. Food costs are set to drop due to tariffs, and Applebee's is doubling down on delivery, with hope to bring off-venue sales to 20% of sales, up from 10%.

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