Applebee’s and IHOP are seeing wealthier customers coming to their restaurants.
The two chain restaurants saw sales from households earning more than $75,000 grow about 6-8% during its second quarter, according to CNN. Both restaurants are owned by Dine Brands.
The network also reported that households earning under $50,000 had declined a few percentage points during that same time period. Still, that didn’t affect the company’s bottom line, with sales up nearly 2% at Applebee’s and up around 3.5% at IHOP.
During a Tuesday call about the company’s quarterly results, Dine CEO John Peyton suggested that wealthier customers are cutting back on high-priced dining and coming to their restaurants, while less wealthy customers are moving away from the brand for lower-cost options.
Both IHOP and Applebee’s have raised prices this year, but they try to cut customers some slack. Applebee’s offers deals for meal add-ons, while the pancake house’s IHOPPY hour sells certain items at a discount starting at 3 p.m.
The brands’ respective flexibility in terms of clientele is “why we perform well during tough times like this,” Mr. Peyton said, CNN reported. He added that the brands fared well during the 2008 financial crisis because they positioned themselves as “value-oriented.”
Mr. Peyton described that as “delicious food [and] generous portions in a wonderful environment at an affordable and approachable price,” the network said.