Chili’s Grill & Bar had a blockbuster quarter, ended June 26, with same-store sales up by 14.8%, an anomaly in the casual-dining segment, in which most brands are struggling with declining traffic and, arguably, a perceived lack of relevance in the public eye.
Chili’s chief marketing officer, George Felix, who joined the brand two years ago, said the chain’s success is the result of a multipronged strategy. That includes an attractive value proposition in its “3 for Me” menu that features burgers with fries, chips & salsa, and a drink for $10.99. But it also includes barbell pricing for people who want to splurge, operational efficiencies to provide better guest experiences, and an improvement in its core items. Burgers, chicken tenders, and Margaritas have already been examined and revamped. Next up: Fajitas.
Want to learn more about how Chili's is winning the value wars? Click here to register for CREATE, where you can hear from Felix live.
Social media wins have also boosted sales.
Felix recently discussed the company’s progress and his upcoming plans for the brands in an exclusive interview with Nation’s Restaurant News.
You just reported a huge bump in same store sales. How did you manage that?
We had a great [fiscal] Q4. We were up almost 15% in sales and just about 6% in traffic, which as you know is pretty unusual, at least right now.
Yes. It’s basically Chili’s and Texas Roadhouse that are doing well in casual dining.
We're really proud of it. We've been on this turnaround strategy for about two years now and it’s been great to see [positive results].
Right now, I think everyone is very value sensitive and conscious. And so we've really picked up on that conversation that people are frustrated with the rising cost of fast food. Being able to position Chili's as the best value in the industry, I think, is really resonating with consumers and we're bringing a lot of new people into Chili's, which is great.
Is the value proposition the crux of your success?
There’s more, for sure. We’re really looking holistically. We're trying to improve our food and drink, obviously, but also be known for value, and part of all of that is Chili's being more relevant in general. A lot of people have stories that they used to go to Chili's or grew up going to Chili's. So they know the brand, but it might not be top of mind for them right now, and it might not be in their rotation of restaurants that they're going to.
So we really just need to put Chili’s back out there and get it back on people's minds. I think being able to showcase our industry-leading value is a great way to do that.
But there’s also been a lot of work on the operational side. Our chief operating officer, Doug Comings and his team of 60,000 team members, we've really been on a mission to simplify their jobs so they can deliver great hospitality, and deliver a better guest experience in a better atmosphere.
We’ve got both sides working: From a marketing standpoint, we're putting Chili's back into the culture and back top of mind for people. And when they're coming into Chili's, they are having a great experience.
As chief marketing officer what are you doing to bring attention to Chili’s?
When I arrived [two years ago], Chili's had not really been advertising nationally for over three years. That kind of contributed to Chili's losing relevance. And I’ve been on a mission to put Chili's back in the cultural conversation. We've done that a few different ways. One is becoming a national advertiser again. You'll see us on TV several times a year. We're focused on high impact places where the eyeballs are. So live sports, premium cable, streaming. But we're not going to be on every week. Probably once a quarter we're going to have a burst of media. We also want to supplement that with being really relevant on social media. We’ve got an amazing team to establish our voice and be able to jump on trending topics and conversations in real time. That has really paid dividends. We use a tool called YouGov. They do a lot of measurement of brand metrics and one is “buzz.” That's something that's very top of mind for us because we want to be a brand that's talked about. And we've seen our buzz scores really take off in the last year. You can particularly see it in Gen. Z. I think that has a lot to do with our presence in social media, whether it be on X or on TikTok or other platforms.
And [we’re also] bringing news to our food and drink program. The “3 For Me” is a big part of that. It's a great value. It's honestly unbeatable. It's an almost half-pound burger, fries, bottomless chips and salsa, and bottomless drink for $10.99.
So value is a big part of it, but it's not the only thing. We’re trying to innovate across our menu as well.
We talk about our Core Four, which is burgers, chicken crispers, fajitas, and Margaritas. We've made our way through three of those in terms of improvements.
So you have the new Smasher Burger and a new Chicken Crisper program. What else?
Our Margarita lineup is pretty great. We've got everything from a $6 Margarita of the Month, so every month you get a new fun flavor, all the up through super-premium Margaritas with [tequila brands] Casamigos, Patrón, and actually next month we’re bringing in Don Julio to add another top-shelf tequila there.
So we’ve got a barbell pricing strategy where those who really need that value price point value, we've got it. But we've also got tons of amazing items that are at higher price point.
So fajitas are next?
That is underway right now. We're right in the middle of testing that and later this year, in Q4 [of 2024], we're going to bring out our new revamped fajita program, which we're really excited about.
What’s going to be new about them?
Fajitas are the most complex of all of all those dishes. You’ve got tortillas, the sizzling skillet, different proteins that can come with it, and all of the toppings.
We've looked at all elements of that to try and see how we can make them as good as possible and meet the needs of people’s evolving tastes.
And then we're also looking at bringing in things like dipables as well, which we know is a big fan favorite.
Maybe dipping fajitas in ranch dressing?
I don’t know; that sounds like a pretty good idea [laughs].
The Triple Dipper [choice of three appetizers with three dipping sauces] is one of the most iconic things we have at Chili's. People like taking our food and dipping it ranch, avocado ranch, salsa, queso. That’s part of what makes Chili’s fun and experiential.
The Nashville hot sauce is new in the past year, and we have a cult favorite in honey chipotle. It’s something that’s been around for a while, but we could probably introduce it to more people.
What have been some of your social media successes.
I'd say the biggest example has been just in the last couple of months. The fried mozzarella and Triple Dipper really took off on TikTok. We’ve been partnering with influencers, like most brands have, but this one really took of organically. We just saw people absolutely loving the fried mozzarella. What really got them was the cheese pull.
I recently had the Fried Mozzarella, and it’s impressive. The cheese wouldn’t stop stretching.
TikTok is tailor-made for things like that. We have, I think, over 30 million views of that now, and we saw a noticeable impact on the business. And a lot of times when these TikTok things happen it’s a big spike and then it’s over, but I can tell you Triple Dipper sales are up 50% year-over-year still, which is crazy.
As a result of what we saw there, the team thought about what the next thing could be. And that’s where the Nashville hot mozzarella came from.
A member of our leadership team asked if we’d ever had fried mozzarella with Nashville hot sauce and our team got down to the test kitchen and in just a matter of weeks we put it out as a secret menu item. And now we have tons of people coming into Chili's and asking our team members for the Nashville hot mozzarella.
That’s what I did during my recent visit.
The Nashville hot mozzarella now has over 15 million views on TikTok from all these different people that are eating it and doing their own cheese pulls. I think we’re reaching a different audience on these platforms than maybe Chili's had done in the past and we're making our food and our brand more relevant because of it.
Contact Bret Thorn at [email protected]
