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Home»Branding»How Applebee’s Lost Its Competitive Advantage
Branding

How Applebee’s Lost Its Competitive Advantage

Editor-In-ChiefBy Editor-In-ChiefApril 19, 2025No Comments8 Mins Read
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How Applebee’s Lost Its Competitive Advantage
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We could all use a dose of neighborhood about now.

The New York Times recently lamented the loss of neighborhood sit-down-and-dine casual restaurants. The commentary reflected the changing way we eat. We may eat restaurant foods, but we are less and less prone to eat that food in the actual restaurant. On the one hand, we opt for convenience. On the other hand, we lose a sense of belonging. We lose the friends or family eating-out-together-occasions. We also lose, according to the article, the mingling of people from all sorts of socio-economic levels. When we forgo eating out, there is no ability for “cross-class friendships.”

“What all this means is that Americans are eating alone more than ever, and some say it’s making them miserable. Dining out by yourself can be romantic, but probably not if it’s in your car.

This article is part of Branding Strategy Insider’s newsletter. You can sign up here to get thought pieces like this sent to your inbox.

“A recent survey by Datassential tells much of the story. Asked about what they found ‘most luxurious’ about eating out, diners ranked one thing above ingredients like lobster, premium beef or even caviar: ‘Dining at a sit-down restaurant in general.’”

Consider this commentary when asking this question: If your brand stood for sit-down casual dining in a neighborly, neighborhood establishment, why would you let that brand promise die? Seemingly, this is what Applebee’s has accomplished. Applebee’s began as a neighborhood establishment. Nothing fancy. Just a place for friends, neighbors, newcomers, and a whole lot of camaraderie.

For years, Applebee’s was the place where regulars would get together. Applebee’s owned the promise of neighborhood. Neighborhood was more than a slogan. Neighborhood was the promise of a very special, relevant experience.

Applebee’s proved that neighborhood is more than a geographic descriptor: it is a mindset. Neighborhood is an amalgam of attitudes and behaviors. Whether it is Mr. Rogers’ Neighborhood, the Cheers bar, State Farm’s neighborly response to a crisis or Applebee’s, neighborhood – being a neighbor – is a powerful force.

The etymology of the word “neighborhood” shows that the concept of “neighborhood” evolved from the words for “near dweller.” The word neighborhood is defined as people living near each other in time, space, and relationship. The most important element of neighborhood has always been human contact. Human contact is much more than geography and the people in that geography.

Yes, neighborhood is about the place where people who share common values live near each other. They may live on the same street or in the same online chat room. Neighborhoods facilitate the discovery and easy association of people destined to become special to one another. In the neighborhood, we live amid a variety of other people in a “casual” habitat that supplies much of what we need without ever being aware of it.  In our highly fragmented, divisive world, we gain a sense of unity and feel that our world has become more whole because of our neighborhoods.

Neighborhood lets us know that we are part of a group, a community, an association of individuals that positively feeds and nurtures our needs. Virtual friends and communities have benefits, but there is nothing quite like the feeling of walking into a local establishment where everyone knows your name and they are glad you came.

The construct of neighborhood is a compelling and motivating force for brands. Hotel Indigo is a brand that promises a neighborhood experience. It promises to deliver knowledge of what it is like to live in the local neighborhood and experience something a little bit different than a non-neighborhood hotel chain. Dunkin’ Brands, parent of Dunkin’s Donuts believes, “At Dunkin’ Brands, we feel fortunate that our restaurants are part of the fabric of so many communities and neighborhoods around the globe, and our franchisees value the role they can play in strengthening their communities.” Starbucks revitalization considers its original concept for being a local place for coffee connoisseurs.

Applebee’s once had a lock on the neighborhood’s emotional, psychic, social, and functional ideas but abandoned these for a “price-product as hero” approach. The sense of neighborhood camaraderie does not appear to be a message the Applebee’s brand wishes to reinforce.

The essence of what made Applebee’s great was that Applebee’s was a neighborhood restaurant not a restaurant in the neighborhood.

There are many restaurants in a neighborhood. For a restaurant in the neighborhood, patrons are guests. And the brand experience is all about the place. Of course, you may be sharing your meal with friends, family, or team members. The staff is personable. The restaurant is a caring space. But the mindset is an “afterthought.” There are many similar options in the neighborhood.

A neighborhood restaurant is different. A neighborhood restaurant is the only one of its kind, filled with regulars and drop-ins who want to be a part of, feel a part of, a particular crowd. The destination draws people through its doors. A neighborhood restaurant is all about the people; sharing personal relationships with friends, family, and others, some new and some recognized. A neighborhood restaurant is personal. You feel well-cared for. A neighborhood restaurant is a home base. At a neighborhood restaurant, the staff are your friends.

Applebee’s was a neighborhood restaurant gathering like-minded individuals who congregated to share personal interactions. The atmosphere was conducive to conviviality and camaraderie.

The New York Times wrote that our changed behavior of not eating at a sit-down casual restaurant altered America’s socio-economic dynamic. Applebee’s was a great leveler. Regardless of who you were, Applebee’s was an informal home-away-from-home, a refuge, accessible and accommodating. It was not just for appetizer deals with margaritas. Applebee’s was never just about the food or the price. You belonged at Applebee’s.

At Applebee’s, you knew you could arrive without a specific plan. You just had a feeling that you would encounter someone of interest (even the bartender) or an acquaintance. You could make friends at the bar and then come back to see them again and again. You were not a stranger. You were familiar, and so were the faces around you. Applebee’s purpose was to be genuine neighborhood friends, making friends at every table over familiar food and beverages. Each Applebee’s promised, “I am your neighbor.” This neighbor experience is oftentimes ignored because of the perceived quality of the menu. Pointing out that people tend to view casual dining chains as mediocre and “inauthentic,” The New York Times says that we overlook the experiences that these restaurants offered: the ability to bring us together.

The New York Times story underscores that without establishments like Applebee’s used to be, we are becoming more isolated and insular. Maybe this is a by-product of COVID-19, or maybe it is a result of digitally managing our lives, such as the Amazon effect, where you do not need to move from your keyboard to have whatever you need on the same day.

Not only sit-down casual establishments, but even fast food and fast casual (think Chipotle and Chicago’s iconic Portillo’s) have altered the balance between dine-in and dine-out. Portillo’s is expanding its footprint with smaller stores. According to data from The Wall Street Journal, Potillo’s has fewer dine-in customers than pre-pandemic numbers. Dine-in customers now account for 40% of sales, whereas pre-pandemic, dine-in customers accounted for over 50% of sales. And, as of October of 2024, all Portillo’s stores have self-service kiosks.

In our ever-changing world where individuality and independence are desired, we should not overlook the universal need of belonging. When our propensity for eating via DoorDash and Uber Eats keeps us separated from belonging, especially belonging to a neighborhood, a neighborhood restaurant brand such as Applebee’s should re-exist.

Brands are powerful promises. Brands are touchstones. Those special brands that can credibly say, “I’m your neighbor,” deliver the belonging we need in an atomistic world. Giving lip service to “neighborhood” over a tagline with rock music emphasizing a product-with-price point is not the way to reinforce the critical mindset that neighborhood is for us.

Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

At The Blake Project, we help clients worldwide, in all stages of development, define or redefine and articulate what makes them competitive at pivotal moments of change. This includes co-creating Plans To Win that propel their businesses and brands forward. Please email us to learn how we can help you compete differently.

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education


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