Chili’s Grill & Bar has a new boss in place, one who isn’t hesitant to make multiple intervention-style adjustments to help turn around sagging sales.
In June, the chain welcomed new CEO Kevin Hochman to the team. Within his first two months on the job, Hochman has made it obvious that he means business, announcing in a recent earnings call his multifaceted plan to drive more sales and enhance profitability through a series of operational changes.
As part of this approach, and much to the chagrin of regular customers, the restaurant will discontinue free meal freebies through its loyalty program.
Members of My Chili’s Rewards have previously been able to enjoy a variety of appealing rewards, most notably complimentary chips and salsa or a free non-alcoholic beverage with every visit. Customers have also benefited from free WiFi, free birthday dessert, and personalised perks such as free appetisers, free kid’s meals, and free delivery. Not to mention that signing up has always been free, and points may be used for takeout, curbside, and delivery orders in addition to dining in.
With these substantial offers taken into account, 37% of the company’s checks are currently filed with a discount. Hochman stated that the corporation would “move away from frequent and deep discounting” in order to achieve a healthy profit margin. Furthermore, the rewards program will be more focused on luring people in the door, something Chili’s has struggled with this year.
“We’re going to restart My Chili’s Rewards,” Hochman said on the earnings call. “We will most likely continue to give items away, but the emphasis will be on shortening the time between visits for our regular customers. And we believe that with a better strategy and execution based on important customer insights, we can make that loyalty programme more traffic driving while also being less expensive.”
In order to increase traffic, Chili’s will also focus more on value meal offerings such as $9 lunch specials and the 3 for Me deal, a strategy that competitor Red Robin has lately found success with.
Other adjustments initiated by Hochman include an overall 8% price rise, streamlining of back-of-house activities, and the deletion of low-performing menu items, while food from It’s Just Wings—delivery-only Brinker’s chicken wing business—will be incorporated to Chili’s core roster at the same time.
Chili’s bars will also be revamped in the coming weeks as part of the chain’s Raise the Bar effort. New beer and bar food menus, as well as an everyday happy hour and the inclusion of NFL Sunday Ticket, will be available in time for the 2022 football season.
