If the last quarter wasn’t so good, get investors excited about the next one. That was what Brinker International’s tried to do today, highlighting such plans for its workhorse Chili’s brand as Mexican-izing the menu, adding delivery service at 450 stores, and rolling out new kitchen technology.
The casual-dining giant also revealed on the quarterly analysts call that it plans to grow its Maggiano’s brand again after a 5-year development hiatus.
Chili’s has been testing delivery, and Brinker CEO Wyman Roberts noted that Maggiano’s rolled out the service when he was heading that brand. Perhaps that’s why analysts on the call seemed more interested in Roberts’ disclosure that Chili’s would improve and add to the Mexican dishes on its menu during the third quarter.
“Our research has shown that we can build upon our current credibility with tacos, fajitas, quesadillas, chips and salsas to further strengthen this platform,” said Roberts.
He did not reveal what items would be added, but commented that Mexican choices constitute the chain’s biggest menu category—“bigger than burgers,” he remarked. Roberts called the selections “a point of differentiation for Chili’s.”
Simultaneous with the Mexican push, Chili’s will replace its fryers with a new model that uses less oil and generally cuts production costs.
The rollout is part of an overall upgrade of Chili’s technology, according to Roberts. For instance, he said, “Our operations, IT and marketing teams are leveraging the latest technology to create an even better to-go experience, even our enhanced online ordering system.”
That ordering technology apparently dovetails with the addition of delivery service, which is expected to be completed at the selected units by Dec. 1.
Chili’s appears to need some extraordinary initiatives. Same store sales fell year-over-year by 2.6 percent at franchised locations and 1.6 percent in company-run stores, which also suffered a 3.4 percent traffic drop.
Roberts acknowledged that it was “a rough quarter,” and blamed macro-economic conditions for the softness. “Consumer sentiment is guarded at best, and consumer confidence remains somewhat volatile,” he said. “And there's some evidence that guests have shifted some of their spending to larger ticket items like homes and automobiles.”
But he called those factors temporary.