Rich people are eating more at Applebee’s and IHOP

In the three months ending June 30, sales of the two chains, which are both owned by Dine Brands, rose about 6% to 8% among households earning more than $75,000 per year. dine ,Noise, CEO John Peyton.

The bump “tells us that guests who often dine at more expensive restaurants are finding Applebee’s and IHOP because of their well-known value positioning,” Peyton said Tuesday during an analyst call discussing the company’s quarterly results. Told. The phenomenon is “why we do well during such difficult times,” he said, adding that brands had relatively good results during the 2008 financial crisis.

But there is a flip side to securing sales among high-income customers.

Both brands saw Sales among households earning less than $50,000 a year declined by a few percent. “We believe they have left us for lower-cost alternatives,” Peyton said. However, those losses didn’t dampen the company’s quarterly results., Sales at Applebee’s locations up for at least a year 1.8% in the quarter, and IHOP restaurants open in at least one year, increased sales by 3.6% over that period.

Applebee’s and IHOP have both raised their menu prices this year. Instead of focusing on absolute prices, they are leaning into other concepts of value.

At all times, “both of our brands … position themselves as value-oriented,” Peyton said. It means “delicious food” [and] Generous portions in an amazing environment at an affordable and acceptable price,” he said, adding “at a time when economics are tough for our guests, our brands have special expertise in adding more value”.

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Applebee’s tries to avoid direct discounts. Instead, it offers deals on food add-ons, such as adding a dozen shrimp for a dollar when you order a steak. Another tactic is giving free gifts. As part of a Top Gun promotion earlier this year, Applebee’s customers who spent at least $25 at the restaurant got free movie tickets.

At IHOP, customers can find discounted items at the brand’s IHOPPY hour, which begins at 3 p.m. at participating restaurants, when entrees, snacks, and sides are sold for lower-than-normal prices. There are also limited-time promotions, for example, that allow kids to eat free.