Chili’s loyalty program leads to sales lag

Despite investments in technology and customer outreach, comp sales at Chili’s Bar & Grill company-owned restaurants slipped 0.8 percent in the fourth quarter ended June 24, parent company Brinker International announced Thursday. Executives said the brand’s new loyalty program, My Chili’s Rewards, is partially to blame.

The transition to the new program spurred the negative sales impact, Brinker CEO Wyman Roberts said on a call with investors. Rather than upselling customers with appetizers and desserts, wait staff were focused on getting guests to sign up for My Chili’s Rewards, and the chain’s average check fell as a result.

Customer traffic at company-owned units also fell, by 0.5 percent.

Franchised Chili’s restaurants, which did not implement the program, saw comp sales increase 2.1 percent year over year. Systemwide, same-store sales increased 0.2 percent.

Net income for the chain doubled in Q4, to $57.2 million from $28.8 million.

In spite of the sales slip, executives are optimistic about the long-term prospects of My Chili’s Rewards.

"Looking ahead to fiscal 2016, we're excited about our new My Chili's Rewards program and have signed up 2.6 million members in just over two months since the national launch,”  Roberts said. “We're also focused on implementing our differentiated culinary point of view and enhancing our digital guest experience, which are key components of our plan to drive fiscal 2016 sales and traffic. We remain confident in our long-term strategy to deliver top line growth and increased shareholder value.” 

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