Q3’s results marked the fifth consecutive quarter of category outperformance in regards to traffic, Roberts said, and the third with a positive sales gap. Chili’s has driven positive same-store sales four straight periods and beat the sector by nearly 5 percent in traffic in Q3.
The value proposition is where Chili’s has really separated itself from competitors, Roberts said. And it’s not as simple as winning at price points smaller brands couldn’t counter.
Ever since Chili’s announced a “traffic-focus strategy” more than a year ago, the brand worked on a flexible platform built around guest experience and food quality, as well as better operations and a simpler, better executed menu. Chili’s hasn’t reduced its portions or compromised quality, Roberts said. “Instead, we’ve maintained and even improved our products, and we offer it at a price point that’s compelling to our guests and works for our business model.”
He used the company’s $5 margarita program as an example. In perhaps a veiled shot at competitor Applebee’s and the Dollarita, he said, “we didn’t go to the lowest possible price point.”
Rather, Chili’s created a program that features premium liquors that change every month. The recent iteration featured brands like Hennessy, St-Germain, Jameson Whiskey and Grand Marnier. “The program generates significant social media buzz, drives traffic and strengthens the brand,” Roberts said.
He added the same notion rings true of Chili’s 3 for $10 deal, which offers an appetizer, entrée, and drink at the price point. In early October, Chili’s reconstituted its on-menu value offerings around the 3 for $10 deal, lunch combos, and its new $25 three-course meal for two (which replaced a 2 for $22 offering).
“I know there's been a lot of concern about the sustainability of this offering,” Roberts said of the 3 for $10. “Could we really deliver quality products at that price point and sustain the volume that it’s helping drive?”
A year later, Roberts said the answer is yes. The business model held up and cost of sales are in line.
“The value strategy is compelling. It’s profitable. And it’s a differentiator for us,” he said.
Chili’s gained room, especially from independents and smaller chains, by leaning into its marketing and ability to promote the value construct in ways regional or single-unit concepts couldn’t. Roberts said the chain moved away from traditional marketing—bringing new news to consumers—to a more guest-centric model that focuses on embedded traits that don’t change by the promotional calendar.
“What matters most to us is that we create a better guest experience every day, that we strengthen the connection with our guests,” Roberts said. “We inspire them to visit more often with relevant, targeted communications, and we delivery better food and service every time they come in.”