The 1,600-square-foot prototype intends to penetrate denser, urban areas with more foot traffic and higher demands for convenience.
Over the course of the pandemic, Chili's off-premises segment ballooned to $1 billion—enough success for the casual-dining to build a store around the business.
On Thursday, The brand opened its first to-go-only location, following several other full-service concepts that've dived into the quick-service world, like Hooters, Buffalo Wild Wings, IHOP, TGI Fridays, Hooters, P.F. Chang’s. The restaurant is based in Dallas, near SMU university. Typically Chili's outlets are around 5,500 square feet and based in suburban markets, but the latest 1,600-square-foot prototype intends to penetrate denser, urban areas with more foot traffic and higher demands for convenience. Orders are accepted through the website, app, or restaurant counter. The restaurant is run by roughly 20 employees.
The new delivery/takeout restaurant will feature slimmer Chili's menu and virtual concept It's Just Wings.
“Chili’s is generating $1 billion each year just in off-premises business, which makes up one-third of our sales,” Wade Allen, Brinker International's senior vice president, chief digital officer, said in a statement. “This new delivery and carry-out only concept gives us a new distribution point and let’s our Guests know that we see how their consumption patterns are changing, and that we’re ready to meet them where they are, or in this case, where they’re going.”
Chili's showcased its off-premises firepower in June 2020 with the rollout of It’s Just Wings, which entered more than 1,000 kitchens at the same time. The brand garnered $170 million in U.S. sales in fiscal 2021, beyond the previous $150 million benchmark. Brinker later tacked on Maggiano's Italian Classics, which was in more than 700 stores to begin the calendar year.
A second to-go-only unit is expected to open in 2023 in Columbus, Ohio. Brinker also has an urban-based ghost kitchen in Manhattan, which offers Chili's and It's Just Wings menus.
“I think there are different ways to approach different incremental markets, and so we’re making sure we understand all of those options,” said CFO Joe Taylor February, explaining Chili's off-premises growth strategy. “I’m not going to put a specific metric out there yet as a target, but it’s meaningful enough to spend a lot of time on it. We think there are a number of different markets, be they urban dense, be they college campuses that respond extremely well to off-premise, both to-go and delivery. There could be some fill-in markets in other places that we’ve penetrated significantly on the suburban rings that we may go into.”
Chili's same-store sales grew 3.8 percent year-over-year in the first quarter, including 7.4 percent pricing, 3.4 percent mix-shift, and negative 6.6 percent traffic. It finished Q1 with 1,592 stores globally, including 1,228 in the U.S. and 364 internationally. The company expects to open 18-19 U.S. locations and 16-20 international stores during its fiscal 2023.