RICHMOND Va. Chili’s “3 Courses for $20” promotion seems to be boosting the casual-dining chain’s traction with consumers, according to the weekly wait-time study conducted by Wells Fargo Securities.
The 1,400-unit Chili’s Grill & Bar is showing a year-over-year increase of eight minutes in its Friday-night wait time, said Jeffrey Omohundro, a senior analyst and managing director with Wells Fargo Securities, based here. Omohundro conducts the weekly wait time study each week at about 300 restaurants covering 13 chains. Wait times at Chili’s were 25 minutes on Nov. 13, he reported, and the average for all surveyed restaurants was 16 minutes. Chili’s is a division of Brinker International Inc. in Dallas.
“We are encouraged by the continued improvement in average wait times at Chili’s and think that the reintroduction of the ‘3 Courses for $20’ promotion in October appears to be gaining considerable traction with consumers,” Omohundro said in his report distributed on Monday. “Chili’s has by far the largest improvement in the quarter-to-date wait times in our survey, with a year-over-year increase of eight minutes for a quarter-to-date average wait time of 18 minutes.”
In October, Chili’s reintroduced its 3-for-$20 promotion, which includes one appetizer, two entrees and one dessert for two guests, after first running it in the summer. Chili’s promotion followed Applebee’s offer of “2 Courses for $20” earlier in the year, which also included a shared appetizer and two entrees, but no dessert. Applebee’s is a division DineEquity Inc., which is based in Glendale, Calif.
Last month, Wyman Roberts, Brinker’s chief marketing officer, said during the company’s latest conference call that the first introduction of the Chili’s promotion drove traffic, but also hurt margins. When it was reintroduced in October, the deal was retooled to include different items that will help margins, as well as continue to build traffic. The chain also took the hiatus from the promotion in September to train servers to up sell new Chili’s items, like the revamped burgers and ribs.
“This time, the three-course promotion really has a dual purpose. It’s not only a compelling value proposition, but it provides a perfect vehicle to introduce guests to the improvements to our core menu items,” he said. “As guests are greeted at the door, they will be reminded of the promotion, but once seated at the table, the attention shifts to the true star of the show, the food.”
Brinker said it holds an ending date for the promotion, but it would not reveal when that is.
The Wells Fargo survey, which does not gauge actual sales but is considered a tool to help determine sales direction, found the longest Nov. 13 wait time averaged 33 minutes at Texas Roadhouse. The shortest wait times were at Red Lobster and Ruby Tuesday, with four-minute waits each.
Chili’s wait-time increase of eight minutes during the current fourth quarter was followed by LongHorn Steakhouse’s increase of four minutes, to a wait of 16 minutes, and Olive Garden’s increase of three minutes to a wait of 27 minutes. The largest wait-time decrease was seven minutes at McCormick & Schmick’s, which saw its wait time fall to eight minutes.
Wells Fargo’s Friday Night Wait Survey also tracks California Pizza Kitchen, The Cheesecake Factory, O’Charley’s, Outback Steakhouse and Red Robin.
Contact Ron Ruggless at [email protected].
