This dialed-in approach is something operators are appreciating, too. “From an operational standpoint, we think the more you can lock your value proposition in, gives your operators more continuity and the ability to execute on a day-in, day-out basis better than having to kind of throw major menu shifts and innovation at them on a frequent basis,” Roberts said.
As noted before, this strategy is all about inspiring repeat visits for the long haul. “You get to build a loyal guest base against the ongoing value propositions that you offer. And that's kind of the strategy we're taking,” Roberts said.
The compelling value proposition of the 3 for $10 deal definitely boosted traffic. And that’s something Roberts said won’t just flash this quarter. “Our preferable strategy is to make sure our value proposition on the base menu is compelling so that we don't have to go in and out and basically kind of whipsaw the restaurants with traffic changes that are just totally promotionally driven. That's our focus,” he said.
Chili’s take(out) on delivery
As an analyst pointed out well into Tuesday’s call, Roberts and the Chili’s team didn’t failed to utter the word “delivery” to that point. It was by design. Roberts said Chili’s focus right now is really on takeout. And the results are showing the strategy to be a smart one. Chili’s to-go business was up 17 percent for the quarter to 11.7 percent of total sales, while Maggiano’s lifted 20 percent on the strength of its new double-your-portion carryout strategy.
But it’s not just the strength of carryout. Chili’s is also unwilling to jump into delivery until it makes sense for the brand and its operators. Currently, when you walk into a Chili’s you’ll see multiple iPads for every delivery partner. They don’t integrate well into the restaurant system, especially during peak hours.
“So our focus right now with some of these big partners is it to say, hey, listen, if you're going to partner with us, you've got to give us an operational model that works and you have to start thinking about how you integrate with us. And I think that's important,” Roberts said.
“And then, obviously, the whole issue around incrementality and profitability is also on the table and then the data around—awe obviously value our customers and the relationship we have with them. So those are some kind of secondary issues that have to be looked at very closely as you kind of get more committed to delivery. Don't have an aversion to it, but we're going to walk into it with our eyes wide open and with partners that kind of understand our business.”
The incrementality question is really a gray area for a lot of brands right now. Roberts said Chili’s is doing “qualitative and quantitative research to understand, OK, where are these guests coming from and how often are they changing their frequency if they're currently our current guest.”
As it stands now, Chili’s is simply more comfortable placing its resources into the carryout world than into the wild frontier of delivery.