Operations

After a long winter, spring brings signs of life to Applebee's and Outback

Data from Placer.ai shows that full-service traffic perked up in March after a difficult end to the year.
Applebee's restaurant exterior
Applebee's traffic rose nearly 4% in March, according to Placer.ai. | Photo: Shutterstock

After a chilly end to 2023, some of the country’s biggest full-service restaurant chains are apparently seeing signs of a thaw this spring.

At 1,536-unit Applebee’s, traffic rose 3.8% year over year in March, according to data from researcher Placer.ai. That comes after the chain’s same-store sales fell 0.5% in the fourth quarter. And it’s also coming from a smaller base of restaurants: Applebee’s shrunk by more than 30 locations in 2023.

Customers are also returning to Outback Steakhouse in greater numbers than a year ago. Traffic at the chain’s some 680 U.S. restaurants grew by 1.9% in March after a fourth quarter in which comps fell 0.3%. Outback is also in the midst of closing dozens of stores.

The sour end to the year for the nation’s third- and seventh-largest full-service chains, respectively, was in part due to inclement weather across the country that kept people from going out to eat. 

But full-service traffic has been falling for years. Since 2019, visits in the sector are down 8%, according to Placer.ai data, while fast-food traffic has increased 5%.

Some of those losses came during the first part of the pandemic, when dining rooms were shuttered and fast food surged in popularity. More recently, though, full service has been losing share to quick service because inflation-weary customers are shifting to lower-priced options. 

But sit-down brands have been spending big bucks to claw back some of those price-conscious customers, largely via meal deals and marketing designed to compete with fast-food chains.

Applebee’s, for instance, kicked off the first quarter by offering dine-in customers all-you-can-eat boneless wings, riblets and shrimp for $14.99. And in March, it launched 50-cent boneless wings for a limited time.

Outback, meanwhile, is pushing a steak and lobster entree for $19.99, part of a stepped-up marketing strategy that is geared toward new menu items and value.

Those follow a successful bid by Chili's Grill and Bar to lure customers with a $10.99 combo meal that includes a starter, entree and drink. 

All three chains have been blanketing the airwaves with ads in recent months.

If Placer.ai’s data is accurate, it suggests that those efforts may be working to pull guests in the door. It could also help that full-service menu price inflation has slowed relative to fast-food prices. In March, FSR prices were 3.2% higher than a year ago, while QSR prices were up 5%, according to the Bureau of Labor Statistics

The full-service sector’s March gains were not limited to Applebee’s and Outback, per Placer.ai. Visits to Applebee’s family-dining sister brand IHOP rose 3.5% last month. And some of Outback’s counterparts under the Bloomin’ Brands umbrella also saw more customers, particularly Fleming’s Prime Steakhouse and Bar, where traffic was up 7.5% year over year.

And then there’s Texas Roadhouse, which has been bucking the trend of slowing full-service traffic for years. The 640-unit steakhouse chain kept humming right along last month, when traffic jumped by 12.4%, according to Placer.ai.

It is worth noting, however, that the data contrasts sharply with Olive Garden’s performance to start the year. The 905-unit Italian casual-dining chain reported a traffic decline of 3.8% during the three-month period ended Feb. 25, citing a noticeable slowdown in visits from lower-income consumers. As the largest full-service chain in the U.S. by sales, Olive Garden is often viewed as a bellwether for the sector.

A fuller picture of full-service’s recent fortunes will become clear in the next few weeks, when many publicly traded restaurant chains will file their quarterly earnings reports.

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