Chili’s Grill & Bar is replacing its 6-year-old tabletop ordering system—one of the industry’s oldest—with a new generation of technology that promises to be more durable and interactive, parent company Brinker International told investors today.
The changeover is part of what Brinker CEO Wyman Roberts described as a multifaceted effort to maintain Chili’s sales momentum through innovation on a number of fronts. The casual chain posted a domestic same-store sales gain of 1.7% for the second quarter ended Dec. 25.
Brinker does not usually divulge sales comps midquarter, but Roberts said the company was suspending that policy because business over the holidays was so robust. He revealed that same-store sales thus far in the third quarter are running more than 4% above the year-ago tally.
Maggiano’s Little Italy, Brinker’s second brand, did not fare as well in Q2, with comps declining 1.4%. But the casual Italian chain had one of its best holiday seasons ever, according to Roberts. Thirty-seven of Maggiano’s 52 units hit all-time sales highs, he revealed.
Orders for off-premise consumption were the primary drivers of Chili’s sales gains during Q2, Roberts said. Delivery and takeout business for both Brinker brands rose 31% during the period and now account for about 17% of total sales.
An adoption of a hybrid delivery model, where orders are taken both through a third-party service’s apps as well as Chili’s own digital channels, boosted the chain’s average check for delivery orders to $25, said Brinker CFO Joe Taylor. Delivery generated 5% of that brand’s sales during Q2, he said.
But, Roberts told financial analysts, Chili’s is “getting more focused on driving traffic back into the restaurant” by spotlighting aspects of the dine-in experience, including menu items that aren’t available for delivery. This month, the chain has been focusing on a version of its $10 three-course meal that features steak as the entree. That dish is only available for customers who come into a store.
In addition, “we're continuing to see growth in our takeout business as well,” and Chili’s will continue to push that option through the remainder of its fiscal years, Roberts said.
Part of the push for dine-in business appears to be the replacement of Chili’s tabletop ordering system with a new generation of equipment. “Just like any new technology, this system is more reliable and offers more advanced features like near-field communication, which allows us to create an even more personal marketing relationship,” Roberts said.
He revealed that the system currently being rolled out has the capability to enable customers to receive messages via their smartphones at the table without having to log into the loyalty program, though that feature has yet to be activated.
The system also provides a way for guests to provide instant feedback on their experience and extends the option of self-payment at the table.
Roberts touted the durability of the new system several times. “It's a more dependable system, less moving parts. That's a good thing for operators and our team members because they can count on the equipment to work every time,” he said.
Overall for Q2, Brinker posted a net income of $27.9 million, compared with a year-ago profit of $32 million. Revenues rose 9.9%, to $869.3 million.
The company said it faced higher labor costs during the quarter.