During Chili’s parent company Brinker International’s second-quarter earnings call in January, CEO Kevin Hochman said consumers are frustrated with inflation, noting that “high prices are more relevant than ever.”
After five or so years of technically being in a high-inflation environment, consumers are weary of their higher cost of living across the board, from food to rent to fuel. Chili’s has leveraged this frustration for its marketing positioning throughout the past several years, including its Triple Dipper, allowing customers to select three appetizers and sauces, and its $10.99 3 For Me Menu, which includes a drink, chips and salsa, and entrée.
In doing so, the casual-dining chain has aggressively targeted fast food, where much of consumers’ ire has been directed. Of course, as the biggest fast-food chain, McDonald’s has experienced the brunt of this messaging.
To wit, Chili’s opened a “Fast Food Financing Store” in New York last year to promote its then-new Big QP burger, also part of the 3 For Me menu. The point was to illustrate that consumers who are “tired of paying high prices for fast food could apply for loans to pay for their next fast-food purchase,” Hochman said in August. When it launched the Big QP, Chili’s noted that the burger featured 85% more beef than a McDonald’s Quarter Pounder with Cheese.
The strategy no doubt worked. Following its launch, Chili’s reported market share gains, a 13% increase in traffic and 21.4% increase in same-store sales.
Now, Chili’s is pulling from the same playbook with its upgraded chicken sandwich lineup, which includes six Big Crispy chicken sandwiches that are also part of the $10.99 3 For Me menu.
To promote the new chicken sandwiches, Chili’s launched a pop-up experience in New York City, inviting consumers to serve as a “jury in the case of Chili’s vs. Fast Food.” Think of the popup like a taste test in which customers can “hear (and taste) the evidence for why Chili’s believes its value is the best in the industry” and then share their verdict with Court TV. Uncoincidentally, the popup is located next to a McDonald’s.
Chili’s also cited a proprietary study conducted in the Dallas-Fort Worth market that found the average Big Crispy breaded filet was 82% larger than the average McDonald’s McCrispy breaded filet.
Sound familiar? A Fast Food Financing popup and a Court TV popup, both reinforcing bigger portion sizes compared to QSRs in an attempt to communicate that Chili’s is a value leader not just in casual dining, but in the entire industry.
“Every time we think the consumer is going to get bored of our messaging, (high prices) keep coming back in social media and in the zeitgeist,” Hochman told analysts in January. “Consumers are really frustrated with high pricing in lots of different areas, not just restaurants. So, the idea of continuing to attack that head-on with unbeatable value and abundance continues to win for us.
“There’s no reason why we would change that.”
Indeed, the chain is striking while the iron is hot. Check out any fast-food conversation on Reddit (or any restaurant industry editors’ TikTok page) and you’ll quickly notice the comments always boomerang back to how expensive fast food has become.
There’s a reason for that; about two years ago, a LendingTree survey found that 78% of Americans now view fast food as a luxury. The category has lost its affordability luster and Chili’s (as well as some other casual-dining chains that have followed suit) have pounced on the opportunity to barrel into the consideration set as a value-centric alternative.
The question now is whether Chili’s can continue its momentum using that same formula following the launch of its chicken sandwiches. It may be tougher this time around; since the Big QP campaign last year, the quick-service category has adjusted and become much more aggressive toward value. McDonald’s has found traction with its Extra Value Meals launch in the fall and just introduced an Under $3 Menu, for instance, while Taco Bell is also experimenting with a Luxe Value Menu with items for $3 or less.
It’s also hard to capture lightning in a bottle twice. But Hochman expects to do just that with Chili’s “distinct and differentiated” chicken sandwiches alongside a proven marketing playbook.
Contact Alicia Kelso at Alicia.Kelso@informa.com
Follow her on TikTok: @aliciakelso