flickr: Mike Mozart
Chili's opened 46 restaurants during the fiscal year.

Chili’s Cutting Menu Down 30—40 Percent Next Year

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Chili’s company owned same-store sales decreased 2.2 percent during the quarter.
By Alex Dixon August 2017 Chain Restaurants

Chili’s and Maggiano’s parent company Brinker International beat both profit and sales expectations for its fourth quarter of 2017 though the company posted both a revenue and sales decline of 8.1 percent.

According to Brinker, the decline is primarily attributable to one less operating week in 2017 than in 2016. Chili’s company owned same-store sales decreased 2.2 percent during the quarter, while U.S. franchised locations fell by only 0.2 percent. Maggiano's comparable restaurant sales increased 0.5 percent during the period.

“The bottom line for us: we weren’t getting the traffic we needed,” president and CEO Wyman Roberts said in a conference call.

And to get that traffic back, Chili’s has a simple plan: make its food better and get it out faster. Roberts says that the plan is not about a turnaround of the Chili’s brand, but how it can deliver what customers have come to expect.

This will include cutting the menu down by 30 to 40 percent and highlighting its signature items: burger, ribs, fajitas, and margaritas. Chili’s is also tweaking its recipes and ingredients while increasing portion size. The brand is upgrading its ribs to a product with 30 percent more meat while keeping the price constant.

Chili’s plans to roll out the menu early next year, which will be promoted through a new marketing plan on digital, radio, and TV spots. Brinker tweaked Maggiano’s menu in the past quarter, which Roberts credits with improving sales and traffic. “We believe this new menu will be the catalyst for Chili’s turnaround,” he said.

For the entire fiscal year, Brinker reported a profit of $150.8 million, down nearly 25 percent from $200.6 million in 2016. Brinker opened 46 Chili’s and Maggiano’s locations during the year, including 36 Chili’s franchise locations, and plans to open between 50 and 58 restaurants next year. There are 1,252 domestic Chili’s restaurants and 52 Maggiano’s locations.