Dive Brief:
- Chili’s same-store sales rose 31%, driven mostly by a 21% increase in traffic year-over-year, according to Brinker’s Q3 fiscal 2025 earnings release.
- Sales at company-operated Chili’s stores increased from quarter to quarter too, reaching $1.29 billion during the period, an 8-K shows. This is a roughly 8% jump from the brand’s $1.19 billion in company-operated sales in fiscal Q2.
- Strengthening sales come as other segment leaders in the restaurant industry, like Chipotle in Mexican fast casual and Domino’s in QSR pizza, reported modest drops in same-store sales.
Dive Insight:
Going forward, Chili’s comps will likely moderate as the chain laps the parts of fiscal 2024 where it saw double-digit sales growth. In Q3 2024, the year-ago period, the chain reported the weakest comps growth, just 3.5%, since before the start of fiscal 2023. Still, a 21% traffic bump is a major achievement for a casual dining chain in any quarter, particularly in an economic environment that has seen plummeting consumer confidence and significant uncertainty in international trade rules.
Brinker attributed its success in driving traffic to operational improvements and its advertising strategy, which “highlights our industry-leading value and encourages guest trial,” according to the earnings release.
The restaurant brand’s advertising strategy has focused on comparing QSR menu prices to the price of its 3 For Me meal deal, which launched with the Big Smasher Burger last year. The chain made a video game last year to hammer home the point, and spoofed the aesthetics of payday lenders with another value-focused campaign this month.
Operational improvements, including a new kitchen display system, have also helped drive sales. Brinker CEO Kevin Hochman described the planned improvements on the brand’s Q2 earnings call.
Chili’s installed a new kitchen display system that “has not only eliminated hundreds of pages of reference finders in the kitchen and made it easier to find recipes, it also has enabled slightly faster ticket times even with the dramatic increases in traffic,” Hochman said.
Additionally, the brand eliminated its wings station, used to support the It’s Just Wings virtual brand, without removing the menu item. Hochman said at the time that the chain planned to convert all of its Chili’s to using TurboChef double batch ovens in place of previous conveyor belt ovens. By late January, a majority were using them after a gradual three-year rollout.
“They cook food much faster and much more evenly. They put out less heat, making the kitchen more comfortable for our team members,” Hochman said. “They save a lot of kitchen space, which helps with kitchen capacity in the future. They are much easier to clean, and they are much more reliable than the current conveyor belt ovens.”
