Struggling national restaurant chain closes 100s of locations
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Key rival Chili's has been posting double-digit growth.
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Much of the restaurant industry has struggled as consumers tighten spending.
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A one-time key rival has shrunk in size, closing hundreds of restaurants.
Chili's has found some magic.
While rival restaurants, and really much of the restaurant industry, has struggled, the chain made famous by its baby back ribs (and the song that goes with them) keeps putting up strong sales numbers.
The casual sit-down dining chain, which is owned by Brinkers International, continues to show that it has figured out a winning formula.
"Company comparable restaurant sales increased 21.3%, including 23.7% for Chili's. Chili's sales growth this quarter was driven primarily by continued increases in traffic, supported by menu innovation and advertising that highlights our industry-leading value and encourages guest trial," the company shared in its fourth-quarter earnings press release.
That's something CEO Kevin Hochman celebrated in his remarks.
"Chili's delivered another strong quarter with sales +24% driven by traffic of +16%. We now have delivered a Q4 2-year sales growth of +39% and 3-year of +45%. With that sustained momentum, along with a strong pipeline of initiatives, we are confident in our ability to grow sales and traffic throughout Fiscal 2026. Chili's is officially back, baby back," he said.
While Chili's has thrived, one of its closest rivals, Ruby Tuesday, has been steadily shrinking as it closes more restaurants every year.
Ruby Tuesday keeps closing restaurants
Chili's and Ruby Tuesday have fairly similar menus. But only Chili's has been doubling down on value, while making those efforts very clear to both current and lapsed customers.
"Chili’s has invested heavily in promoting its 3 for Me value menu, which offers customers an appetizer, entree, and a nonalcoholic beverage starting at $10.99. It stepped up that effort further this week with a new burger, the Big Smasher, that is designed to compete with McDonald’s Big Mac. It also launched a new slate of TV ads that compare Chili’s value proposition to fast food," Restaurant Business shared.
Communicating value has helped Chili's pass rival Applebee's in sales.
“A combination of value-based marketing, social media buzz, and improved restaurant operations helped push Chili’s to its strongest sales performance in well over a decade,” Technomic's Top 500 noted, Nation's Restaurant News reported.
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