Chili’s this week reported its 19th straight quarter of same-store sales growth, as my colleague Joe Guszkowski reported. Maybe more importantly, its two-year same-store sales have been up at least 35% for five straight periods.
That’s an unheard-of run, particularly for a casual-dining chain in an era of drive-thru and mobile ordering.
There are several lessons we can glean from these results, some of which brands can use themselves. They may not be able to replicate Chili’s results, but they may be able to get on a better trajectory.
Here are some of those lessons.
Anything can happen, especially now
It’s tempting to say that we will never see a run like the one Chili’s is on right now. Chili’s had never generated these kinds of results before! It’s a casual-dining chain. Nobody would have guessed they would do this, so why expect it would happen again?
Except it could. This is an era of extreme sales results, driven by social media. Several restaurant chains over the past three-plus years have generated results in a similar stratosphere, including Wingstop, which at points last year had bettered Chili’s current two-year results.
That it’s happening to a chain like Chili’s that had been a largely slow-growing brand for the past two decades means that anybody can do this, so long as everything falls in the right place.
Fix operations first
Chili’s after CEO Kevin Hochman’s arrival focused first on operations, ensuring that stores looked good. Managers were required to fix problems. The company also didn’t shy away from service investments if they’re necessary.
Running good restaurants isn’t the sexiest thing on the planet. But it’s crucial in a period of intense competition to make sure that customers have an inviting place to come to when they visit your restaurant.
Improve the food
Chili’s decided to focus on a few core menu items and early on made improvements to the quality of those items, including burgers, margaritas, fajitas and chicken tenders.
Quality is crucial in a competitive restaurant business. Restaurant chains, including casual-dining and fast-food brands, are competing with a growing number of competitors that promise higher-end menu items.
Restaurant brands need to make sure that their menu items meet the quality that customers demand. Some of the biggest comebacks—such as Domino’s nearly two decades ago—started when they made big improvements to core menu items.
By fixing operations and improving the food, Chili’s was ready for the customer onslaught that would hit the chain’s restaurants.
Ignore social media at your own risk
Much of Chili’s success was built on social media. The chain has effectively leveraged social media to build its sales and took advantage when some of its offerings went viral.
Chili’s effectively used social media to tap into consumer angst about menu prices to market its 3 for Me value offer, which helped fuel its early sales. It then took full advantage when the “cheese pull” trend ignited on TikTok.
It then doubled down on it all, adding new products to the 3 for Me offer that mimicked McDonald’s Big Mac and Quarter Pounder. After customers started ordering a lot of mozzarella sticks, the chain developed Nashville Hot Mozz, which extended the cheese pull trend.
Take advantage of luck
Luck always plays a role in success, and the cheese pull trend in particular demonstrates that sometimes brands can’t necessarily foresee something taking off until it does.
What companies do with that luck matters. Chili’s noticed the mozzarella sticks sales and then created a new product that won over customers in Nashville Hot Mozz. Chili’s became popular on social media and then it just kept pushing the envelope.
That’s how you respond to good fortune.