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Traffic rebound lifts Chili’s comps 2%—even with a value push

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A 4% rise in traffic offset Chili’s ongoing campaign to offer better everyday value, pushing up same-store sales by 2% for the first quarter ended Sept. 26.

The upswing in transactions came from both on-premise dining and takeout, according to Wyman Roberts, acting president of the chain and CEO of parent company Brinker International. To-go orders jumped 17% during the quarter, raising carryout’s portion of unit sales to just shy of 12%, according to Brinker CFO Joe Taylor.

To-go sales rose 20% for sister concept Maggiano’s on the strength of Double  Carryout, a promotion that invites customers to add a second entree or multiple sides to a standard carryout meal at a deep discount. A second serving of specialty pasta costs only $9 more, while extra sides add $3.

Maggiano’s transactions nonetheless slipped 2.1% for the quarter, keeping same-store sales flat.

Roberts attributed Chili’s gains in traffic and sales to the initiative begun last year to simplify kitchen operations and the menu.  That shift in strategy led to more consistent execution and improved service, with food served faster and hotter, he asserted.

“Our next step is executing more consistently, especially during peak times,” said Roberts.

The chain is also continuing to stress value, with bargain offers such as $5 margaritas or a combo meal of two entrees and an appetizer for $22.

A shift by customers to less-expensive menu options shaved Chili’s comps for the quarter by 2%. But Roberts reaffirmed Chili’s commitment to offering everyday value, and championed the chain’s move away from limited-time offers.

Another key objective, he indicated, will be landing and keeping the best employees available. “The whole industry is rightfully concerned about talent,” Roberts said. He asserted that Brinker has engineered a “best in class” system for finding the best in the labor pool and holding onto them, but did not elaborate.

Brinker’s net income hit $26.4 million, or more than double the $9.9 million that was generated in the same period of 2017.  Profits were lifted by proceeds from a sale-leaseback of 141 Chili’s restaurants during the quarter.

Revenues rose 1.9%, to $753.8 million.

 

 

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