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Now Applebee's takes on McDonald's with a bargain burger - after Chilli's launched a bigger, cheaper 'Big Mac'
Applebee's wants to win customers from McDonald's, Shake Shake and Wendy's with deals - including a bargain burger.
John Peyton, CEO of Dine Brands - which owns Applebee's and IHOP - said that sit-down restuarants like this and fast food chains are in direct competition.
In an attempt to lure Americans fed-up with increasing fast food prices, he said Applebee's has the 'Whole Lotta Burger' with fries for $9.99. It has bacon, cheese, lettuce, tomatos and pickles.
The move to compete with fast food chains echoes that of Chilli's. This week it unveiled its new 'Big Smasher' - a bigger version of the Big Mac - that comes with fries and a drink for under $10.
'The Whole Lotta Burger for $9.99 - if you can have our burger for $10, which is great quality, abundant and eat in our restaurant, in our experience, why would you eat a $10 burger out of a paper bag in your car?' John Peyton, the CEO of Applebee's parent company Dine Brands, told CNBC on Wednesday.
Applebee's Whole Lotta Burger with fries for $9.99
Applebee's is launching a new value burger to compete with McDonalds
A Big Mac Meal can often cost above $13
A Big Mac meal can cost almost $15, while Shake Shake, Five Guys, Wendy's have burgers that alone cost $10.
Applebee's is famous for offering value for money but has seen a 4.6 percent drop in sales in the first quarter of the year as customers balk at price riese.
Dine Brands is set to lean further into value as it reported a drop in sales at its restaurants, including 1.7 percent at IHOP in an earnings call on Wednesday.
Lower-income consumers, that count for between 40 and 50 percent of the company's customers, were visiting less frequently and trading down on the items they ordered Payton explained.
Chili's has also sought to rival McDonald's with the launch of its new 'Big Smasher' burger.
The Texan restaurant chain launched the Big Smasher at the end of April in an attempt to offer a cheaper and heftier alternative to its fast food competitors who have hiked prices.
A Big Mac Meal in Branford, Connecticut, costs $14.69, according to the McDonald's app.
At a nearby Chilli's in East Haven, a Big Smasher - with fries, a drink and a starter - is $10.99 when as part of the '3 for Me' value meal.
'We've always had incredible burgers on our menu, but for about a year now, we've been hearing more and more frustration from fast-food fans over rising costs,' Paquette told Business Insider.
'We believe that Chili's 3 for Me offers better value than you'll find in any drive-thru and, with the all-new Big Smasher burger, we just made the '3 for Me' even better' George Felix, Chili's chief marketing officer added.
'We believe our guests can enjoy better quality, better pricing and a better experience every time' Felix added.
The Big Mac and the Big Smasher both include onions, pickles, shredded lettuce, American cheese and Thousand-Island-style dressing. The only difference is that the Big Smasher does not have the extra bit of bun in the middle.
Chili's launched its Big Smasher burger in April as a rival to McDonald's Big Mac
Chili's is aware that fast food customers are becomingly increasingly frustrated with price hikes
Fast food prices have been on the rise with McDonald's raising their prices around 10 percent in 2022 and 2023
The similarity is something Chili's is not shying away from, writing in a press release that the new burger has 'flavors fast food lovers will recognize.'
Advertisements for the new burger claim it is better than 'a tiny drive-thru burger' while showing their '3 For Me' meal next to a Big Mac.
As a result of inflationary price rises and customer dissatisfaction, chains have increasingly leaned into promotional offers such as Chili's 3 for Me to entice customers.
Applebee's '2 for $25' deal offers customers two entrees and the choice of an appetizer or two side salads.
Similarly, Red Lobster's 'Shrimp Your Way' meal deal includes three shrimp dishes for $25 or two for $21.