Irene Kim: By the
end of 2017,
it seemed like the
end for Applebee's.
The company had just
closed 99 locations,
with plans to close
up to 80 more.
And this was just the
end of a struggle
that Applebee's had
been fighting for years.
But then something
unexpected happened:
Applebee's made
a comeback.
Sales went up 5.5%
in the first nine
months of 2018.
After falling nearly
8% just a year before.
It looks like people
are once again
Commercial: Eatin' good
in the neighborhood.
Kim: So, what happened?
Bill and TJ Palmer opened
the first Applebee's in 1980.
Three years later,
they sold the
restaurant concept
to WR Grace and Company,
and it quickly blew up.
By 1994, there
were more than
500 Applebee's locations
across the US.
And just four years
later, in 1998,
the company opened
its 1,000th restaurant,
rivaling competitors'
store locations,
like IHOP, with 800,
and Denny's, with more than
1,000 stores nationwide.
Kate Taylor: Applebee's
was really doing well
because they were reliable.
They weren't too fancy,
they weren't too cheap,
but they hit a nice
sweet spot
in the middle for people.
Kim: Dishes like Applebee's
boneless buffalo wings
became a fan favorite,
and promotions like
half-priced appetizers
made Applebee's a
popular spot
for customers looking
for a good deal.
But then, at the
end of 2007,
the recession happened,
and people stopped
eating out as much.
Katie Couric: We are
in a recession.
News anchor: The longest
recession since World War II.
Couric: But the question
now: When will it end?
Kim: As Applebee's
sales struggled
in the post-recession
economy,
it attempted to
reinvent itself
as a modern bar and grill
to draw in up-and-coming
millennials.
But it didn't work.
Taylor: Applebee's tried
to be a little bit trendy,
a little bit cool.
And it just came off as kind
of corny for most people,
where it felt like they
were trying too hard
to win over millennials.
Kim: New menu items
like hand-cut $20 steaks
and brisket nachos
not only failed
to bring in new
millennial diners;
they alienated
the very customers
who had made Applebee's
successful in the first place:
People looking for a
reliable, affordable meal out.
By 2015, Applebee's
sales were falling.
And only continued to
fall, year after year.
In 2017, the company
closed 99 locations
and announced plans to
close 60 to 80 more
the following year.
Julia Stewart, the CEO of
Applebee's parent company,
Dine Brands Global,
reportedly stepped down
because of Applebee's
poor performance.
The former waitress was
one of the industry's
most celebrated and
longest-serving executives.
For a brief time,
it looked like
Applebee's was done for.
But instead of folding,
it turned things around.
Taylor: Starting in
late 2017, 2018,
Applebee's parent
company, Dine Brands,
had new
leadership come in,
and this new leadership
was very, very focused
on being inexpensive and
not trying to be too trendy.
Basically, they
took Applebee's
back to the basics.
They're not gonna try
and win over millennials
with these fancy
new menu items.
They're gonna find
something that's inexpensive
that people are
proven to like.
The biggest thing that kind
of kicked off the turnaround
for Applebee's was the
Dollarita, the $1 margarita.
Kim: After the success
of the Dollarita,
Applebee's
quickly launched
its Neighborhood
Drink program,
releasing a new $1 to
$3 drink every month.
And that move has paid off.
Alcohol now accounts for
15% of Applebee's business.
John Cywinski: We've
sold more than 55 million
Neighborhood
Drinks at Applebee's
since we launched this
program in October of 2017.
Kim: And although
overall revenue
hasn't quite caught up,
the company is going
pretty strong.
Cywinski: 2018 was the best
year that Applebee's had
in the past 25 years.
We're very proud of that.
When I think
about Applebee's,
we are, in many respects,
America's kitchen table.
We've got 1,700 locations,
and we very much believe
"eatin' good in
the neighborhood"
embodies who we are
and America resonates or
connects with our brand.
Kim: But will Applebee's
be able to
keep up
the momentum?
Taylor: Applebee's has
lost momentum a little bit
so far in 2019.
It's hard because they had
such a good year last year.
It's hard to keep that going.
Millennials, they
figured it out.
They want, honestly,
the same thing every
generation wants:
good prices, cheap drinks.
They need to
kind of figure out
if there's anything
different that they need
to do for Gen Z.
Kim: What do you think
of the new Applebee's?
Let us know in the
comments below.
