Chili's Grill&Bar has a new leader at the helm, one that isn't afraid to implement several intervention-style changes to help turn around weakening sales.
The chain welcomed new CEO Kevin Hochman to the team in June. Within just two months on the job, Hochman has made it clear he means business and announced in a recent earnings call his multipart plan to drive more sales and increase profitability with a handful of pivots in the chain's operational strategy.
As part of this plan, and to the dismay of loyal customers, the restaurant will be putting its foot down on free food giveaways offered through its rewards program.
Up until now, members of My Chili's Rewards have been able to enjoy many enticing perks—most notably free chips and salsa or a free non-alcoholic beverage during every visit. Customers have also taken advantage of free WiFi, free dessert for birthdays, and personalized rewards such as free appetizers, free kid's meals, and free delivery. Not to mention signing up has always been free and rewards could be used for takeout, curbside, and delivery orders–not just for dining in.
With these generous offers factored in, a whopping 37% of the company's checks are currently filed with some kind of discount. To promote a healthier profit margin, Hochman said the company would "move away from frequent and deep discounting." And, the rewards program will instead focus more on simply bringing guests in the door—something Chili's has struggled with this year.
"We're going to reboot the My Chili's Rewards program," Hochman shared in the earnings call. "We probably will still give some things away, but it will be focused more on compressing the time between visits for our loyal guests. And we think we can make that loyalty program more traffic driving, but less costly with a better strategy and execution based on key customer insights."
Chili's will additionally shift more attention to its value meal deals such as $9 lunch specials and the 3 for Me deal in order to boost volume–a strategy that competitor Red Robin has also found success with recently.
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A few other changes which Hochman has set in motion include an overall 8% price increase, simplification of back-of-house tasks, and the elimination of low-performing menu items while food from It's Just Wings—Brinker's delivery-only chicken wing business—will simultaneously be added to Chili's core lineup.
Chili's bars will also receive a major overhaul within the next few weeks as part of the chain's Raise the Bar initiative. New drink and bar food menus, an everyday happy hour, and the addition of NFL Sunday Ticket will all be available just in time for the 2022 football season.