How Chili’s wants to become more Chili’s again
By Jordan Valinsky, CNN
Dallas (CNN) — The future of Chili’s looks a lot like its past.
Red-leather booths, a staple of Chili’s restaurants in the 1990s, are coming back to dining rooms. So are the colorful tile tables, but without the grout that made them difficult to clean. And the walls will be adorned with other nostalgic touches, like a print of its original menu from 1975 with prices that aren’t too far from where they are now.
Those nods to the past are why the thriving casual-dining chain is debuting its new look in Dallas, Texas, the same city where it was founded more than five decades ago.
We sat down with Brinker International CEO and Chili’s president Kevin Hochman in early June, who told CNN over a plate of freshly cooked chips and salsa: “Our objective is we want to make Chili’s more Chili’s.”
Starting next year, Chili’s aims to remodel about 10% of its roughly 1,200 US restaurants each year until completion. It’s part of Hochman’s gambit to maintain momentum after 20 consecutive quarters of same-store sales growth and double-digit rises in traffic.
Restaurant remodels can spark a bump in traffic and sales, most recently at Denny’s and Burger King. But there can be risks, like last year’s debacle at Cracker Barrel. Some customers were so angry by the stripped down interior and modernized logo that the chain quickly backtracked.
“These brands are so big. (Chili’s) is 50 years old, and they don’t get there by accident,” Hochman said. “It’s because there’s things about them that people grew up with that made them really, really special, whether it was the margaritas or the fajitas or the tile tables.”
Chili’s success is a rare feat during an overall slowdown in dining. It’s now the second-largest casual-dining chain by revenue in the United States, according to data firm Technomic, fueled by better food and pushing value to customers wary of higher prices.
It’s also been successful in taking “meaningfully larger percentage of visitors” from both its full-service and fast food rivals because of its focus on value, according to a Placer.ai report.
Hochman, who joined Chili’s parent company, Brinker, in 2022, helped orchestrate the turnaround. He credits a simple recipe: good food, quality service and low price points.
“Even our guest check today, (against) casual dining, is under $3 to $4 versus the average,” he said. “There’s nothing really magical about that.”
Under Hochman’s tenure, Chili’s slimmed down the menu to improve wait times. He also nixed coupons in favor of easy-to-understand promotions, like its popular “3 for Me” value meals, which include an appetizer, entree and a drink starting at $10.99. Its “Triple Dipper” appetizer deal went viral on TikTok for the fried mozzarella cheese pulls.
After spending hundreds of millions of dollars over the past few years on minor improvements — fixing roofs and windows or repairing equipment — Hochman said the time was right to update the overall look. The restaurants’ appearances hadn’t been touched in more than two decades.
“We’re shifting from defense of just making sure the buildings feel really good,” he said. “Now we’re moving to offense, which is ‘how do we start elevating the atmosphere?’”
Chili’s is leaning heavily into nostalgia, like installing Southwestern tile on the building’s exterior and adding a “Welcome to Chili’s” sign to the entrance that was drawn by the chalk artist who decorated the original location. The recognizable tiles were also added to a redesigned bar that highlights its popular margaritas.
Hochman declined to disclose whether the four renovated Chili’s locations (all in the Dallas area) have had an increase in traffic, but said the company conferred with founder Larry Levine for feedback on the new look.
He hopes the redesign will lead to more word of mouth and bring in new customers.
“When you can do the fundamentals really well, that can become your competitive edge, and that’s why people will choose you over others. That’s been our secret sauce right now,” Hochman said.
Size matters
Over a bubbling fryer in the kitchen, Hochman personally prepared Chili’s next creation that he thinks will help sustain sales: the Big Crispy chicken sandwich.
It’s the latest dig at his fast-food rivals. Chili’s previously created dupes of McDonald’s Quarter Pounder (called the QP) and the Big Mac, or in Chili’s world, the Big Smasher — all sold in a value meal with chips and drink. Both have been major drivers in revenue, which has grown nearly 50% since 2022.
The tactic was born out of the idea that the budget chains have gotten unaffordable. Hochman would know because he joined Chili’s after an eight-year stint at Yum! Brands, in various roles including as KFC’s US president.
“There’s a lot of guests out there that are a little bit frustrated where fast food prices have gone, and historically fast food has been about value and convenience,” he said. “We saw that opportunity based on what was happening in prices and said, ‘Hey, we think we can get a combo meal at $10.99.’”
Gripping a raw piece of chicken before it was submerged in batter and flour, he remarked that the new Big Crispy is 80% larger than McDonald’s frozen filets. Size matters to Chili’s, and they’re using it to combat the shrinking portions at other chains.
“We see that on social media where consumers complain about how small portions have gotten,” he said.
Hochman isn’t done tinkering with the menu. Pastas are next to get an overhaul, so they’re served “piping hot,” plus a new protein that he wouldn’t immediately reveal. Then there’s “bigger, more delicious” salads that will complement its diet-aimed “Guiltless Grill” menu, which is getting a refresh.
Although Chili’s has emerged as a bright spot in the casual dining category, it isn’t immune to broader economic pressures. Consumer confidence is hovering at record lows, and many are pulling back on discretionary spending.
But he thinks the chain will continue to thrive.
“What I tell our team is we can control what we can control,” Hochman said. “If consumers are going to pull back their trips to restaurants, are they going to choose the ones that maybe they had an OK experience last night, or are they going to choose the one that they know they’re going to have a great experience?”
He added: “We’re going win in that environment and then if the macro-environment gets better, we’re going to continue to win even more.”
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