When George Felix became CMO of Chili’s Grill & Bar in July 2022, he found a storied brand that had lapsed into irrelevancy.
The chain known for its catchy baby-back ribs commercials had not advertised on TV in more than three years. It had lost some real estate in consumers’ minds. Under new CEO Kevin Hochman and a revamped marketing department, Chili’s was determined to change that.
“We needed to put Chili’s back on the map,” said Felix, who had previously worked with Hochman at KFC, where they helped develop the chain’s blockbuster “Return of the Colonel” campaign.
Two years later, 1,230-unit Chili’s is back in a big way.
This summer, the chain launched a bold attack on fast-food chains that struck a nerve with price-conscious consumers. And it used a renewed social media strategy (and a little luck) to stoke back-to-back viral TikTok trends that both generated buzz and drove new customers to its restaurants.
Those efforts resulted in a step change for the business last quarter. From April through June, Chili’s same-store sales leapt nearly 15% year over year and by more than 11 points compared to the previous quarter. It was one of the brand’s best performances ever, a feat made even more impressive by the fact that many of its competitors reported same-store sales declines during the same period. Since March, the stock of Chili’s owner Brinker International has risen more than 50%.
Chili’s laid the foundation for its massive marketing victory about 18 months ago, when the brand debuted its 3 for Me value meal. The deal offers bottomless chips and salsa, an entree, fries and a drink starting at $10.99. Chili’s felt the meal presented a great value at a time when restaurants were raising prices rapidly to offset inflation.
3 for Me became the centerpiece of the brand’s advertising as it returned to the airwaves. The ads were effective, helping Chili’s win back some of the traffic it had lost. But the chain would soon take it to another level.
About six months ago, Chili’s marketers began to notice consumers complaining about fast-food prices on social media. Those prices had risen by about 30% since before the pandemic, and people were feeling the pinch. That gave Chili’s an opening. In February, the brand’s X account (formerly Twitter) reshared a post from a customer upset about the prices at chicken tender chain Zaxby’s.
“bby u can get a drink, chips and salsa, AND entree for $10.99 at Chili's,” Chili’s wrote in response to the original post.
Similar posts followed, along with a hashtag: #ChilisFastFoodSupportGroup. And consumers’ sticker shock grew.
“The more that we were keeping track of the conversation, it really just continued to go,” Felix said. “We really saw that as an opportunity to insert Chili’s as a solution to that frustration.”
The Big Smasher has helped put Chili's back on the map. | Photo courtesy of Chili's Grill and Bar
In April, Chili’s doubled down. It unveiled the Big Smasher Burger, a take on McDonald’s Big Mac featuring diced red onions, lettuce, pickles, Thousand Island dressing and American cheese on a nearly half-pound smashed beef patty—more than double the meat on a Big Mac, Chili’s was quick to point out.
Chili’s put the Big Smasher on the 3 for Me menu for a limited time, which gave it a prime opportunity to argue that, at $10.99, it was a better deal than fast food given the size of the burger and the full-service experience. It ran three TV ads that featured the Big Smasher in contrast with fast food.
The response from customers was “palpable,” Felix said. And it translated to soaring sales and traffic.
“To put it plainly, I think fast food’s kind of broken the promise they’ve had with consumers for a long time,” Felix said. Chili’s offered an alternative, and in striking fashion.
Still, it was a risky move to go after the biggest restaurant chain in the world. “You have to be really proud and confident in what you’re selling,” Felix said. Chili’s took that confidence from what it was hearing from consumers.
“Any time you’re tapping into an existing conversation versus trying to start something is a more powerful place to start from,” Felix said.
It didn’t take long for McDonald’s and other fast-food chains to respond to consumer outcry over prices. In June, the burger giant began running a $5.99 combo meal deal. It was the opening salvo in a value war that would go on to define the summer’s dining landscape.
Felix said he’s not worried about how those rival deals might impact Chili’s. He noted that many of them are limited-time offers, while 3 for Me is permanent.
“[Fast-food chains] are doing things in the short term to try to claw some of that back,” he said.
Chili's capitalized on a viral moment with Nashville Hot Mozz. | Photo courtesy of Chili's Grill and Bar
Chili’s fast-food offensive was responsible for the bulk of the chain’s success this summer. But it got a second burst of momentum from TikTok, where the chain went viral twice for the same menu item in a matter of months.
Sometime this spring, Chili’s noticed a surge of customers coming in to try the chain’s fried mozzarella sticks. The cheesy bar food staple, which is part of the chain’s Triple Dipper appetizer basket, was going viral on TikTok, with users showing off their “cheese pulls” as they took a bite. The trend generated 50 million social media views for Chili’s, both organic and paid.
Chili’s still doesn’t know how the frenzy got started. Though it has been ramping up investments in social media, including partnerships with influencers, fried mozzarella “really took off organically,” Felix said. “We can’t take credit for that.”
He hypothesized that fried mozzarella translates well to social media because of the cheese pull and the item’s unusually large size—they’re more like planks than sticks.
The marketing team wanted to pour gas on the fire. In August, it launched Nashville Hot Mozz, which spices up the traditional Fried Mozzarella with Nashville Hot Sauce. The item was not listed on Chili’s regular menu, so only those in the know could get it.
The secret, spicy variation led to another wave of viral TikToks and another 50 million views, most of which was organic, Felix said.
Chili’s had caught lightning in a bottle. The CMO acknowledged that there was some luck involved in that, but said there was more to it. “What I will give credit to my team for is being ready for when it happened and how to capitalize on it,” he said.
Going viral can be a double-edged sword. While it can provide a short-term boost, it also sets a high bar for future growth. A year from now, Chili’s will be expected to outdo its massive numbers from last quarter. How does it plan to stay in the spotlight?
For one, it responded to the recent burst in traffic by upping its investments in labor and restaurant maintenance in an effort to leave a good impression on new customers.
“As soon as we saw that spike, we got on a call with our managers and we said, ‘Look, guys, this is our opportunity, given how much traffic is coming in, to try to keep them, right?’” Hochman said during Chili’s earnings call last month.
He added that Chili’s strong performance continued into July and August, suggesting that the late spring success was more than just a blip.
“We feel really good about the way we’re doing this,” Felix said. “We don’t see it as a big spike and an immediate dropoff. We are seeing this sustain for several months.”
The Big Smasher has been doing so well that the chain plans to continue promoting it for the rest of the calendar year, after which it will rotate the $10.99 message to feature another item. It will continue to call out fast food on value. And it will continue to take “big swings.”
“Our goal is for people to say, ‘Did you see what Chili’s just did? I can’t believe that.’” Felix said.