IHOP has begun experimenting with delivery in a few locations and is in discussions with third-party companies to conduct a full test later this year, executives say.
“Clearly, off-premise dining has become a much bigger trend for all guests, particularly Millennials,” said Darren Rebelez, IHOP president, in an interview after parent company DineEquity Inc. released second-quarter earnings.
Rebelez said IHOP’s decision to investigate a delivery launch was “rooted in guest insights,” which indicated a demand for the service.
While IHOP’s Spartanburg, S.C.-based competitor, Denny’s Corp., debuted 24-hour delivery in May, Rebelez said rolling out a delivery platform was not about beating other competitors to the market.
Rebelez said mixing delivery into IHOP’s offering will allow the restaurant to continuing attracting both its older and younger customers.
“One of the things that’s unique about IHOP versus a lot of other concepts is that we’re multi-generational,” Rebelez said. “We have guests that span all age demographics and breakups from small children to their grandparents.”
He said that IHOP is in discussions with partners such as Amazon and others regarding a delivery test later in 2017.
No formal tests have been conducted at this time and the initiative has only been tinkered with at select locations under the radar, he said.
During the second quarter ended June 30, same-store sales declined 2.6 percent at IHOP, but Richard Dahl, DineEquity’s chairman and interim CEO, said the brand remained on “solid ground.”
Same-store sales at DineEquity’s casual-dining brand, Applebee’s Neighborhood Grill & Bar, fell 6.2 percent. John Cywinski, Applebee’s president, said a wider demographic base was not the answer for that brand.
“Bottomline, we’ve taken our eye off the ball here and we have work to do,” Cywinski said during the second quarter earnings call in reference to a focus on Millennial customers.
Cywinksi said the restaurant’s upcoming marketing efforts would once again gear toward Baby Boomers and Generation X.
As of June 30, Glendale, Calif.-based DineEquity owned and franchised 1,740 IHOP restaurants and 1,984 Applebee’s units.
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