Applebee’s is ditching millennials after they forced hundreds of restaurant closures

Source: Business Insider

Kate Taylor

Aug. 27, 2017

Applebee’s has given up on millennials.

Earlier in August, executives announced that the chain plans to close between 105 and 135 locations this year. Applebee’s closed 46 locations in 2016. Sales have been declining, with same-store sales dropping 7% in the most recent quarter.

The chain’s failed attempt to win over millennial diners is at least partially to blame for struggles, according to executives.

“Over the past few years, the brand’s set out to reposition or reinvent Applebee’s as a modern bar and grill in overt pursuit of a more youthful and affluent demographic with a more independent or even sophisticated dining mindset, including a clear pendulum swing towards millennials,” John Cywinski, Applebee’s brand president, said in a recent call with investors.

He continued: “In my perspective, this pursuit led to decisions that created confusion among core guests, as Applebee’s intentionally drifted from what I’ll call its ‘Middle America’ roots and its abundant value position. While we certainly hope to extend our reach, we can’t alienate Boomers or Gen-Xers in the process.”

Attempts by Applebee’s to win over millennials included a “comprehensive business transformation” meant to modernize the chain in 2016. Franchisees spent millions of dollars on changes such as installing fire grills and redesigning locations.

Moving foward, Cywinski said that Applebee’s will turn its focus away from millennials. Instead, it will market more to “routine traditionalists” who actually enjoy casual dining chains and have favorite menu items, as well as “value seekers” who are looking for deals at sit-down restaurants.

Applebee’s isn’t the only sit-down, casual dining brand trying – and mostly failing – to win over millennials.

Chains such as Buffalo Wild Wings and Ruby Tuesdays have faced slumping sales and store closures.

“Millennial consumers are more attracted than their elders to cooking at home, ordering delivery from restaurants, and eating quickly, in fast-casual or quick-serve restaurants,” Buffalo Wild Wings CEO Sally Smith wrote in a letter to shareholders earlier this year.