In Q4, Chili’s traffic outperformed the industry by more than 200 basis points. Roberts said the comps sales reflect a significant investment to grow the brand’s loyalty database. Chili’s actively promoted its My Chili’s Rewards Program, which became its focus after the brand bailed on American Express Co.’s Plenti Rewards program last quarter. Customer feedback showed the program was too complex. Chili’s rerouted to My Chili’s Rewards and also abandoned a points-based system. Electing instead to focus on growing its database. Roberts said Chili’s grew “our already sustainable database by more than 25 percent,” in the quarter.
“This gives us additional marketing leverage throughout the year to drive incremental visits for the sizable portion of our guest base. We saw a meaningful increase in the percentage of our guests who engage with us through this platform and will continue to expand our direct marketing capability to optimize the efficiency of those channels,” he said.
Roberts said Chili’s would be able to leverage these names and relationships for months, if not years. To get there, the brand took a 1 percent hit in pricing, which Roberts said was an investment and marketing strategy he believes will pan out long-term. Chili’s expects to get back into the positive 1.5 percent pricing territory moving forward.
“The strategy is working. Sales and traffic are both up, guests are telling us through their satisfaction scores that their experience is faster, the food is better, and the value is best-in-class,” Roberts said. “And our team appreciates this back to our roots strategy and the commitment to simplify their experience. Engagement score is at all-time highs, and our employee turnover is significantly better than the industry.”
To-go takes flight
Chili’s recorded double-digital off-premises growth in the quarter. The brand is seeing its mix of to-go between 11.5–12 percent of total sales. Roberts said the mix isn’t moving as much as some casual brands “because we are growing the whole pie.”
“We see year-over-year mid-teens to upper teens growth on a very consistent basis in our to-go business. But we are growing both to-go and in-dining room operations, which gives a little less impact to the overall mix,” he said.
Meanwhile, Chili’s delivery is a very small slice of that graph. Roberts said a shift is coming, however. “… We are going to be leaning more aggressively into delivery as we move throughout the fiscal year, and I would anticipate it having some impact on our ability to move the business forward, particularly in the second half of the fiscal year,” he said.
A lot of this will come down to simplification. Roberts said some restaurants have multiple tablets for multiple delivery partners, and “you just have to really wonder about how easy it is and how consistent the operators are able to manage that information flow.”