IHOP is adding burritos and bowls to its menu as the pancake chain tries to entice customers back to its locations for breakfast, lunch and dinner.
Like many restaurants, the Dine Brands chain cut back its menu as the coronavirus pandemic weighed on its business last year. Facing supply chain challenges and hoping to simplify the jobs of its kitchens, IHOP’s menu went from 12 pages to just one page, double-sided. Chief Marketing Officer Brad Haley estimates that the chain cut more than a third of its menu items.
“We have the opportunity to do something more innovative now as, hopefully, we’re kind of moving into a new normal,” Haley said.
Starting Tuesday, the new items will be available nationwide all day, with prices starting at $5.99. Customers can choose bowls or burritos with six styles of toppings: the Classic, Country Breakfast, Spicy Poblano Fajita, Southwest Chicken, New Mexico Chicken or Spicy Shredded Beef.
About half the items include traditional breakfast items like eggs or sausage. Haley cited burritos’ position as the fastest-growing breakfast item in the U.S. as one reason why the chain decided to add it.
But the new options also play into IHOP’s multiyear push to appeal to lunch and dinner customers. The strategy kicked off in 2018 when the chain temporarily changed its name to IHOb to promote its new line of burgers. The stunt quadrupled IHOP’s burger sales. The following year, IHOP upgraded its chicken offerings. And in September, it started an “IHOPPY HOUR” value menu for customers who stop in between 2 p.m. and 10 p.m.
The additions come as fewer customers choose to dine at restaurants. Full-service restaurants like IHOP have been hit harder by government restrictions and consumer concerns about dining in-person during the pandemic. Unlike fast-food chains, they don’t have drive-thru lanes or a menu that’s formulated to travel well. Takeout and delivery orders are failing to make up for the lost sales, according to UBS Evidence Lab.
IHOP is hoping that the burritos and bowls will help bolster its to-go sales all day long. Breakfast has been the hardest hit meal by the pandemic, with many consumers reverting to eating cereal or brewing their own coffee while they work from home.
“Burritos and bowls are very, very portable, so it’s a great time to introduce them as well given the people’s desire to consume them where they want,” Haley said.
The menu strategy takes a page from the book of IHOP’s top competitors: fast-casual chains. For years, Chipotle Mexican Grill and Sweetgreen have used their own bowls to lure customers away from full-service chains with their convenience and high-quality food. Years before the pandemic, the full-service segment reported declining foot traffic as consumers stopped visiting.
On the heels of that trend, IHOP said it would launch a fast-casual spinoff called Flip’d by IHOP. It had planned to open the first location in Atlanta last April, selling menu items like pancake bowls. The plans were shelved as Covid spread across the U.S.
“We look forward to being able to open Flip’d actually some time in 2021,” Haley said. “We’re not at the point yet where we can talk publicly about what that looks like, but we’re still very interested in Flip’d and feel like we’ll get some opened this year.”
Shares of Dine have fallen 18% in the last year, giving it a market value of $1.16 billion. The company, which also owns Applebee’s, saw its net sales plunge 30% in the first nine months of 2020.
Source: Business - cnbc.com
