The expansion plans come as Chili’s same-store sales increased 12.1 percent year-over-year in Q2, and 5 percent against two years ago. Maggiano’s comps lifted 78.1 percent year-over-year, but dropped 5.6 percent compared to two years ago.
The good news for Brinker is that it has more employees on a per restaurant basis than it did prior to COVID. Instead of two or three applications rolling in at a time, managers are now seeing 10 or more.
That’s why the company is doubling down on its retention efforts, beyond just a paycheck. One example is a virtual learning platform that allows Brinker to train hourly workers and managers from the restaurant support center.
Roberts described it as a “live interactive experience that improves the speed, quality, and consistency of our training while reducing costs and burden on our restaurant managers.” The system has led to a 20 percent improvement in retention of new hourly employees.
Chili’s has also rolled out a new “Team Service Evolution” labor model in which servers use a tablet to take orders as opposed to punching in orders at a POS system. The method requires fewer bodies, meaning more tables for waiters and higher wages.
For managers, Brinker is focusing more on leadership development programs for new and tenured leaders, like the “Women Take the Lead” initiative.
Historically, the rehire rate for Chili's managers (those who left, but came back) has been in the low mid-single digits. That rate is now more than doubled. It’s even higher for hourly workers.
“What we’ve seen with turnover, is if they’re training well and onboarded into the brand well, then they stay longer and they’re actually stickier and they get through that first 30-60 days,” Roberts said.
To mitigate rising food and labor costs, Chili’s has increased prices by more than 4 percent. At Maggiano’s, it’s a 5 percent hike with the latest menu launch.
Roberts, however, isn’t too concerned with customers lowering to quick service or turning to at-home consumption. Instead, he believes Chili’s will benefit from guests stepping down after dining at premium fine-dining and upscale concepts.
“If you just think about the amount of steak consumers have eaten during COVID, it’s kind of interesting,” Roberts said. “That’s usually a higher-priced item, it’s higher-check-average concepts. … We control what we control, and what we can control is our value propositions and the quality of our brands. We have one of the strongest value propositions in the industry and casual dining.”
Brinker views labor inflation as more structural and long-term, but commodity volatility is seen as transitory. That mindset drives how the company approaches food contracts.
“Having been through a couple of these cycles with products specifically, there are some products that are at all-time highs and they will come down,” Roberts said. “Where we have typically been looking to contract for a longer period of time, we’ll not do that as much. We’ll play the market a little more."
“There’s some risks associated with that obviously—more volatility. But we don’t think it’s prudent necessarily to lock in on these prices,” he continued.