Growing comps starts with reimagining the menu. Chili’s will lean into a barbell strategy that provides everyday value to low-income customers and uses food and beverage innovation to mitigate trade-down from higher-paying guests. Hochman is looking to drive traffic, but without deep discounting and giving away as much free food through the rewards program. The CEO said 37 percent of items are moving at a discount, which he referred to as “simply too high.”
Hochman believes the chain has competitive value, like its 3 for Me deal featuring an appetizer, entrée, and a drink starting at $10.99, and a $9 lunch combo. But he added that Chili’s must do better at promoting these offerings. The brand is in the process of reinvesting marketing dollars from My Chili’s Rewards comped meals into advertising everyday value.
“I think there are some things I can bring from my [quick-service restaurant] days that I think can help the business,” said Hochman, who previously led KFC and Pizza Hut. “I think more strategic pricing. I think [quick-service] does an exceptional job of understanding how do we make sure that the great value that we offer is advertised and drives traffic? … One of the lessons in [quick-service]—if you’re going to have great value, you have to make sure you talk about it. Quite frankly, it’s been a little bit invisible in our business the last few years, and we need to get back on air once we’re ready to do that.”
READ MORE: Chili's Develops New Menu to Battle Inflation
To simplify operations and reduce costs, Brinker is looking to cut low-mixing items, redundant pantry SKUs, unnecessary dishware, and unneeded processes that don’t help the customer. Less complexity should help with poor retention, which is leading to higher-than-normal training expenses and use of overtime. When Hochman spoke with operators, he learned that it’s become more difficult to work inside a Chili’s. He used the example of portioning proteins, like counting shrimp or measuring brisket. One hour of prep per restaurant equates to the company paying 46 years’ worth of labor annually.
Hochman recalled a team member suggesting that instead of counting all shrimp prior to opening, employees simply grab the necessary number when the dish is ordered.
“That seems pretty logical and something that we could immediately do," the executive said. "And probably there was a time where we put in proteins and we were really worried about the waste on them. And labor rates weren’t where they were, and so they might have been good decisions 15 years ago. But today, in a world where wage rates are where they are and turnover rates are where they are, that’s not the most fun task to do. Why don’t we get rid of that and save millions of dollars in terms of labor that can either be redeployed back into the restaurant or potentially to the bottom line?”