Chili’s Grill & Bar had a blockbuster quarter ending June 26with like-for-like sales up 14.8%, an anomaly in the casual dining segment where most brands are struggling with declining customer numbers and arguably also with 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 multi-pronged strategy. That includes an attractive value proposition in the “3 for Me” menu, which offers burgers with fries, chips and salsa and a drink for $10.99. But there are also dumbbell prices for people who want to splurge, operational efficiencies to give guests a better experience and an improvement in core products. Burgers, chicken tenders and margaritas have already been reviewed and revamped. Next up: fajitas.
Successes in social media have also increased sales.
In an exclusive interview with Nation’s Restaurant News, Felix recently discussed the company’s progress and his future plans for the brands.
You just reported a huge increase in sales in existing stores. How did you achieve this?
We had a great fourth quarter. We were able to increase our sales by almost 15% and our traffic by almost 6%, which, as you know, is quite unusual, at least right now.
Yes. Chili’s and Texas Roadhouse are essentially successful in the casual dining space.
We are really proud of it. We have been pursuing this turnaround strategy for about two years now and it is great to see positive results.
I think right now everyone is very price conscious and sensitive. And so we’ve really tapped into the 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 is really resonating with consumers, and we’re bringing a lot of new people to Chili’s, which is great.
Is the value proposition at the core of your success?
There’s definitely more. We’re looking at it holistically. We’re obviously trying to improve our food and beverages, but also to be known for our value, and part of that is making Chili’s more relevant in general. A lot of people talk about how they used to go to Chili’s, or they went to Chili’s as kids. So they know the brand, but it might not be the most important thing to them right now, and it might not be on the list of restaurants they’re going to go to.
So we just need to get Chili’s back on the map and remind people of it. I think we can do that well if we can demonstrate our industry-leading value.
But there was also a lot of work to do on the operational side. Our Chief Operating Officer, Doug Comings, and his team of 60,000 people are committed to simplifying their jobs so they can deliver great hospitality and provide guests with a better experience in a better atmosphere.
We’re doing both sides: From a marketing perspective, we’re bringing Chili’s back into the culture and bringing it back into people’s consciousness. And when they come to Chili’s, they have a great experience.
What do you do as a marketing manager to raise awareness of Chili’s?
When I started (two years ago), Chili’s hadn’t done a national ad in over three years. That kind of contributed to Chili’s losing relevance. And I made it my mission to get Chili’s back into the cultural conversation. We’ve done that in a couple of ways. One of them is to become a national advertiser again. You’ll see us on TV multiple times a year. We’re focusing on high-impact places where there’s attention on us. So live sports, premium cable, streaming. But we won’t be on the air every week. We’ll probably have a media surge once a quarter. We also want to complement that by being really relevant on social media. We have a fantastic team that’s establishing our voice and being able to jump on trending topics and conversations in real time. That’s really paid off. We use a tool called YouGov. They measure a lot of brand metrics and one of them is “buzz.” That’s something that’s at the top of the list for us because we want to be a brand that people talk about. And we’ve seen our buzz numbers really skyrocket in the last year. You see that especially with Gen Z. I think that has a lot to do with our social media presence, whether it’s on X or on TikTok or other platforms.
And we’re also bringing news to our food and beverage program. The 3 For Me is a big part of that. It’s a great value. It really can’t be beat. It’s a half-pound burger, fries, chips and salsa, and a drink for $10.99.
Value plays a big role, but it’s not the only thing. We’re also trying to renew our menu.
We’re talking about our four core products, burgers, chicken crispers, fajitas and margaritas. We’ve already improved three of them.
So you have the new Smasher Burger and a new Chicken Crisper program. What else?
Our margarita lineup is really great. We have everything from the $6 Margarita of the Month, so every month we have a new, amazing flavor, to super premium margaritas from tequila brands Casamigos and Patrón. And next month we’re bringing in Don Julio to add another top-tier tequila.
So we have a pricing strategy for barbells where we give those who really need that price what they need. But we also have a lot of great items that are more expensive.
So fajitas are next?
That’s underway right now. We’re testing that right now, and later this year, in the fourth quarter (2024), we’ll be launching our new, revamped fajita program, which we’re really excited about.
What will be new about them?
Fajitas are the most complex of all dishes. They have tortillas, the sizzling pan, various proteins that can go with them, and all the toppings.
We looked at all the elements to figure out how to make them as good as possible and meet people’s changing tastes.
And then we’re also looking at introducing things like Dipables, which we know are really popular with fans.
Maybe dip 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 love to take our food and dip it in ranch, avocado ranch, salsa, queso. That’s part of what makes Chili’s so fun and experiential.
Nashville Hot Sauce is new since last year and we have a cult favorite in Honey Chipotle. It’s been around for a while but we could probably introduce it to more people.
What have been some of your successes on social media?
I would say the biggest example has happened just in the last couple of months. The fried mozzarella and triple dipper really took off on TikTok. We’ve worked with influencers like most brands do, but this one really took off organically. We just saw that people absolutely loved the fried mozzarella. What really won them over was the cheese pull.
I recently had the fried mozzarella and it was impressive. The cheese just wouldn’t stop expanding.
TikTok is made for this kind of thing. I think we’re over 30 million views now and we’ve seen a noticeable impact on business. And often when these TikTok things happen, there’s a big spike and then it’s over, but I can tell you that triple dipper sales are still up 50% year over year, which is crazy.
Based on what we saw there, the team started thinking about what could happen next and that’s how Nashville Hot Mozzarella was born.
A member of our leadership team asked us if we had ever had fried mozzarella with Nashville hot sauce, and our team went into the test kitchen and within a few weeks we introduced this as a secret menu item. And now tons of people come to Chili’s and ask our team members about the Nashville hot mozzarella.
That’s what I did on my last visit.
The Nashville Hot Mozzarella now has over 15 million views on TikTok from all the different people eating it and making their own cheese pulls. I think we’re reaching a different audience on those platforms than Chili’s maybe has in the past, making our food and our brand more relevant.
Contact Bret Thorn at (email protected)
