Applebee’s wants to win customers from McDonald’s, Shake Shake and Wendy’s with deals, including a cheap burger.
John Peyton, CEO of Dine Brands, which owns Applebee’s and IHOP, said restaurants like this and fast-food chains are in direct competition.
In an attempt to appeal to Americans fed up with rising fast food prices, he said Applebee’s has the ‘Whole Lotta Burger’ with fries for $9.99. It has bacon, cheese, lettuce, tomatoes and pickles.
The decision to compete with fast food chains echoes that of Chilli’s. This week he presented his new ‘Big Smasher’ – a larger version of the Big Mac – that comes with fries and a drink for under $10.
‘The Whole Lotta Burger for $9.99. If you can eat our burger for $10, which is high quality, filling, and eaten in our restaurant, in our experience, why would you eat a $10 burger in a paper bag in your car?’ John Peyton, CEO of Applebee’s parent company, Dine Brands, he told CNBC On Wednesday.
Applebee’s Whole Lotta Burger with fries for $9.99
Applebee’s launches new budget burger to compete with McDonalds
A Big Mac meal can often cost more than $13
A Big Mac meal can cost almost $15, while Shake Shake, Five Guys and Wendy’s have burgers that alone cost $10.
Applebee’s is famous for offering good value for money, but has seen a 4.6 percent drop in sales in the first quarter of the year as customers resist rising prices.
Dine Brands will lean further toward value as it reported a decline in sales at its restaurants, including a 1.7 percent drop at IHOP on an earnings conference call Wednesday.
Low-income consumers, who make up 40 to 50 percent of the company’s customers, visited less frequently and marked down items they ordered, Payton said.
Chili’s has also sought to rival McDonald’s with the launch of its new ‘Big Smasher’ burger.
The Texas restaurant chain launched Big Smasher in late April in an attempt to offer a cheaper, heavier alternative to its fast-food competitors that have raised prices.
A Big Mac meal in Branford, Connecticut, costs $14.69, according to the McDonald’s app.
At a nearby Chilli’s in East Haven, a Big Smasher, with fries, a drink and a starter, is $10.99 as part of the ‘3 for Me’ value meal.
“We’ve always had amazing burgers on our menu, but for about a year now we’ve been hearing more and more frustration from fast food fans about rising costs,” Paquette he told Business Insider.
“We think Chili’s 3 for Me offers better value than you’ll find at any drive-thru, and with the new Big Smasher burger, we’ve just made ‘3 for Me’ even better,” George Felix, Chili’s chief marketing officer. the officer added.
“We believe that our guests can enjoy increasingly better quality, better prices and a better experience,” added Félix.
The Big Mac and Big Smasher include onions, pickles, shredded lettuce, American cheese and Thousand Island dressing. The only difference is that the Big Smasher doesn’t have the extra bun in the middle.
Chili’s launched its Big Smasher burger in April as a rival to McDonald’s Big Mac
Chili’s is aware that fast food customers are increasingly frustrated by price increases
Fast food prices have been rising, and McDonald’s increased its prices by about 10 percent in 2022 and 2023.
Similarity is something Chili’s doesn’t shy away from, writing in a press release that the new burger has “flavors that fast food lovers will recognize.”
Ads for the new burger claim it’s better than “a small takeout burger” while showing their “3 For Me” meal next to a Big Mac.
As a result of inflationary price increases and customer dissatisfaction, chains have increasingly turned to promotional offers like Chili’s 3 for Me to attract customers.
Applebee’s ‘2 for $25’ deal gives customers two entrees and the choice of an appetizer or two salads.
Similarly, Red Lobster’s ‘Shrimp Your Way’ meal deal includes three shrimp dishes for $25 or two for $21.