Dine Brands is gearing up to reinvigorate its sales strategy this year after experiencing a challenging 2024 for its flagship restaurants, Applebee’s and IHOP. The company aims to attract consumers with a broader selection of value meals and engaging marketing efforts designed to resonate with younger audiences.
In a conference, Dine Brands CEO John Peyton acknowledged last year’s struggles, stating, “Our performance in 2024 was disappointing, but we are determined to improve in 2025.” He emphasized the necessity for “compelling messages and promotions” to draw diners back into the restaurant space.
Dine recently reported that fourth-quarter U.S. same-store sales fell 4.7% for Applebee’s and 2.8% for IHOP, indicating a downturn after four consecutive quarters of declining sales for these brands. The stock has plummeted 50% over the past year, leaving the company’s market cap at approximately $386 million.
This decline followed a period of strong growth fueled by a post-pandemic dining boom. However, a shift was notable as many consumers with annual incomes below $75,000 started opting for home-cooked meals or choosing other chains offering better deals amid rising costs of living.
The pullback in spending has significantly impacted the casual dining landscape, leading to numerous bankruptcies among similar restaurant chains, including names such as Red Lobster and TGI Friday’s. Most recently, On the Border sought Chapter 11 protection as it reorganized its business.
Despite its efforts, Applebee’s has struggled to break through the competitive noise in what is often termed the “value wars” within the restaurant sector. Competitors like Chili’s have gained traction with successful promotions and social media campaigns. Chili’s has effectively capitalized on consumer trends, achieving a remarkable 27.4% same-store sales growth recently.
Currently, Applebee’s flagship value promotion, the “two for $25” deal, contributes to about 20% of the chain’s sales. However, Dine plans to diversify these offerings with options that cater to larger parties, aiming to attract customers seeking more variety.
In conjunction with these culinary efforts, the company is seeking to enhance its online presence. Peyton remarked, “We recognize our need for improvement in social media engagement and cultural relevance to connect better with our audience.”
Furthermore, Dine Brands aims to appoint a new president for Applebee’s, ideally someone with a robust marketing background who can bolster connections with younger consumers. Peyton, who is currently serving as the interim president, expressed the importance of finding a leader versed in franchising and restaurant operations to help restore the brand’s competitiveness.
Looking ahead, Dine forecasts modest changes in sales for 2025, predicting a potential decline of up to 2% for Applebee’s, while IHOP’s same-store sales may see a slight rise or fall. The company is committed to re-establishing its footing in a challenging market, focusing on effective communication and innovative menu developments aimed at younger diners.
