Chili's and Applebee's are engaged in a dispute over their budget-friendly meal options.
In one corner, we have Applebee's, which recently introduced a $9.99 "Huge Value Offer," and on the other side, there's Chili's, famous for its successful $10.99 promotion. Both establishments have been providing more worthy deals on their menus as consumers face financial pressures due to inflation.
The competition between the two has gained traction on platform X, where Applebee's hinted that its deal is superior to Chili's, priced $1 less. Applebee's deal offers a choice between a fried chicken sandwich or bacon cheeseburger, fries, and a soda.
Although Applebee's didn't explicitly call out Chili's, the latter took notice and retaliated, saying "mention us next time," highlighting that their deal includes unlimited chips and salsa. The message concluded with a sarcastic "y'all could never."
Most users on platform X seemed to favor Chili's, which boasts a sizeable following and a more humorous social media presence. One user posted, "An extra dollar to avoid Applebee's is worth it." Chili's, however, downplayed the conflict, stating they were just "engaging" with each other.
Applebee's X account and its corporate parent (CNN didn't get an immediate comment from them.)
In an interview with CNN, Chili's Chief Marketing Officer George Felix said, "We enjoy purposefully injecting some fun into our social platforms and are fiercely committed to ensuring our customers receive the best value in casual dining."
Chili's Shines, Applebee's Stumbles
Chili's and Applebee's have been long-term rivals, with their restaurants frequently situated in American suburban areas and often engaging in special meals and deals matches. Over the past few years, Chili's has surged, while Applebee's has struggled.
Chili's has introduced several deals, like the $10.99 "Three for Me" deal and added a burger that resembles a Big Mac, targeting customers' frustration over rising fast-food prices.
Additionally, Chili's Triple Dipper appetizers have captured TikTok's attention and account for 11% of the chain's sales. This surge helped Chili's post a 14% increase in same-store sales in its most recent quarter and seen Brinker's (EAT) stock soar over 200% this year.
On the other hand, Applebee's has been less fortunate. Despite having more locations than Chili's, annual revenue was only slightly greater, according to Technomic data.
In its most recent quarter, Applebee's experienced a 6% decrease in same-store sales, marking the sixth consecutive quarter of decline. Shares of Dine Brands (DIN), its parent company, dropped by 35% this year.
Promotions, such as $1 margaritas and 50-cent wings, ceased to be effective, and the company acknowledged that customers wanted transparent pricing information. Responding to this, Applebee's launched its $9.99 limited-time deal in November.
Applebee's is also transitioning its menu to "more comprehensive full-meal value offers" and planning to continuously upgrade its value propositions to keep its customers engaged, according to John Peyton, Dine Brands' CEO, during their last earnings call.
It seems that the new deal is working for Applebee's. Foot traffic increased by 2% in November after a 9% drop in October, as per Placer analytics data. Meanwhile, Chili's foot traffic increased by an impressive 33%, marking its sixth consecutive period of growth.
The business strategy of Applebee's includes offering competitive deals, such as their $9.99 "Huge Value Offer" with options for a fried chicken sandwich or bacon cheeseburger, to attract customers dealing with inflation-related financial pressures.
In response to Applebee's promotion, Chili's emphasized the value of their deal, which includes unlimited chips and salsa, highlighting the extra dollar customers can save by choosing their restaurant.
