Dive Brief:
- IHOP is expanding its $6 everyday value menu from five to seven days a week, the brand announced in a Monday press release. Some locations will charge $7 for the menu, which first launched as a weekday traffic-driving measure last fall.
- Lawrence Kim, IHOP’s president, said the expansion of the menu was motivated by increasing consumer price sensitivity.
- IHOP’s move comes as casual dining chains use value offerings to position themselves as affordable, experiential alternatives to fast food, and could help the chain end a six-quarter streak of same-store sales declines.
Dive Insight:
On Dine Brands’ most recent earnings call, CEO John Peyton said two of the company’s highest priorities were “enhancing our menu and value platforms, [and] communicating our brand's value more effectively through improved marketing.”
Applebee’s value plays, like the Two-for-$25 deal, helped end a run of sales declines and return the brand to positive traffic.
Kim said the chain tested the expanded availability of its value menu in Q2 and saw positive results in traffic and sales.
IHOP’s $6 value menu, which is available from 7 a.m. to 10 p.m., is composed of four meals. Breakfast competitor Denny’s also recently added a meal-centered value slate, the 5 Slams for $5 lineup. Even in QSRs, the value emphasis is shifting from individual menu items to full meals, with McDonald’s reducing the price of eight core combos, including breakfast meals, by about 15%.
The value update will be amplified by a marketing campaign featuring “whimsical, family-focused storytelling designed to resonate with Gen Z and millennial audiences,” according to the press release.
As inflationary pressures have pushed up prices at QSRs and fast casuals — with negative traffic results at segment leaders like Chipotle — casual dining chains have stepped up their value offerings. Chili’s, Applebee’s and Olive Garden all saw positive same-store sales growth last quarter, but the breakfast segment of the market, and Denny’s and IHOP especially, have lagged this success. The recent value plays by those brands could reverse that.
