More than 80 percent of Chili’s restaurants have reopened dining rooms, and the customers are responding.
As of Monday, 873 of the 1,060 company-run Chili’s in the U.S. have open dining rooms. At those units, comps were down 11 percent during the week ending June 3. Restaurants reported limited cannibalization by retaining more than 70 percent of the off-premises sales they were seeing when dining rooms began to reopen in the final week of April, the company said.
Chili’s has been aggressive with its reopening strategy. During the week ending April 29, more than 300 units reopened. That figure doubled by mid-May.
Rick Badgley, executive vice president and chief people and administrative officer, told FSR in May that the company has used a government relations team and an industry relations team to stay on top of government mandates, which allowed the company to anticipate changes and reopen swiftly.
“When we’re ready to go, literally the next day, we are open for business and staffed,” Badgley said.
Here’s how comp sales at company-run dine-in stores have trended:
- Week ending April 29: –16.5 percent
- Week ending May 6: –14.4 percent
- Week ending May 13: –14.2 percent
- Week ending May 20: –12.3 percent
- Week ending May 27: –10.3 percent
- Week ending June 3: –10.8 percent
And here’s a look at how overall same-store sales have progressed at corporate locations:
Week ending April 1
- Chili’s: –62.9 percent
- Maggiano’s –77 percent
- Company-owned overall: –64.6 percent
Week ending April 8
- Chili’s: –57.8 percent
- Maggiano’s: –73.7 percent
- Company-owned overall: –59.7 percent
Week ending April 15
- Chili’s: –51.6 percent
- Maggiano’s –64.6 percent
- Company-owned overall: –53.1 percent
Week ending April 22
- Chili’s: –42.5 percent
- Maggiano’s: –73.7 percent
- Company-owned overall: –46.8 percent
Week ending April 29
- Chili’s: –42.1 percent
- Maggiano’s: –72.1 percent
- Company-owned overall: –45.9 percent
Week ending May 6
- Chili’s: –31.6 percent
- Maggiano’s: –73.8 percent
- Company-owned overall: –37.1 percent
Week ending May 13
- Chili’s: –28.5 percent
- Maggiano’s: –61.4 percent
- Company-owned overall: –33.4 percent
Week ending May 20
- Chili’s: –25.2 percent
- Maggiano’s: –70.8 percent
- Company-owned overall: –31.7 percent
Week ending May 27
- Chili’s: –22.5 percent
- Maggiano’s: –66.4 percent
- Company-owned overall: –28.3 percent
Week ending June 3
- Chili’s: –18.9 percent
- Maggiano’s: –69.9 percent
- Company-owned overall: –25.6 percent
Chili’s parent Brinker International claimed its comp sales are on average more than 20 points higher than its competitors in the casual-dining industry over the past five weeks. Brinker is headquartered in Dallas. Texas was one of the first states to welcome back dine-in service at limited capacity.
The company’s performance appears to be in line with what Brinker CEO Wyman Roberts predicted in late April.
“No one knows for sure what lies ahead,” Roberts said during the Q3 earnings call. “But I know this—if it’s a half a dining room scenario, no one will get more out of a half a dining room than we will. When we return to full dining rooms, no one will outperform us.”
The chain’s consistent improvement is similar to trends seen across the full-service segment. In the week ending May 31, major full-service restaurant chains saw a 37 percent decline in transactions compared to a year ago, which was 15 percent better than the previous week, according to The NPD Group.
The brand said it’s now generating positive cash flow and using it to pay outstanding debt. For the most part, the company is current with rent payments. This has been a challenge for many casual brands, including Red Robin in recent weeks, which was facing a lawsuit on its HQ property for back rent.
The brand has $113 million in cash, with $429 million available in its credit facility.
CHILI’S COVID-19 ROAD SO FAR:
“As we reopen our dining rooms across the country, our commitment is to do so safely, including training for team members and physical changes in our restaurants. With hospitality in our DNA, we’re glad to be together again, but at a safe distance,” Roberts said in a statement. “Our guests are telling us they are glad to be back at the table, too, as demonstrated by increasing sales as dining rooms reopen.”
In May, Badgley said 40 percent of roughly 30,000 employees have returned to work with more than 600 dining rooms online at the time—a number that’s surely increased with nearly 900 dining rooms now open.
Restaurants have received positive feedback from guests who are returning to the dining room.
“The general sentiment that we’ve seen both on social media and the feedback mechanisms that we have is how impressed [customers] are with the steps we have taken with both team members and guests,” Badgley said. “There’s been a few exceptions where there’s been questions, but most of the time, we’re seeing guests being overly impressed with what we’re doing. We like to think that we’re taking that one extra step beyond CDC guidelines within our restaurants.”
Brinker also announced Monday that Steve Provost has taken over as president of Maggiano’s. He previously served as chief concept officer for Chili’s and replaced Kelly Baltes, effective June 3. The company said in a securities filing the move was a “change in leadership structure.”
Provost helmed the president job at Maggiano’s from November 2009 to March 2017, when he shifted to Chili’s.