Out of all the popular American bar and grill chains, Chili's might be the one with the
most noticeable presence, but today, the company finds itself at a crossroads.
Here are the real reasons Chili's is struggling.
Market trends change every year, but one thing we've seen consistently over the last decade
is the declining popularity of casual dining chain restaurants.
"Chili's.
It's just too easy to get."
There are two reasons for this: Over-expansion and more competition.
Between 2006 and 2014, restaurants were opening at an alarming rate - faster than the population
of the United States was growing, according to The Wall Street Journal.
Although the growth has slowed, many of these excess restaurants remain, making it harder
to turn a profit.
Then there's the growing popularity of quick service chains like Chipotle and Five Guys,
which offer food that's fast, lower-priced, and just as tasty.
That means casual dining spots like Chili's are in trouble.
Unless the chain can figure out how to stand out in the marketplace, they'll continue seeing
declining traffic and sales whenever a new competitor rears its head.
"You're right.
There's no law against just having appetizers for dinner."
"I didn't think so."
People who eat at Chili's want to feel like it's a "safe" choice.
You know what the food will be like, and how the atmosphere will feel.
"Our first date was at Chili's exactly two years ago."
"One and a half years, actually."
"It was a Friday night."
"Saturday Lunch."
But in 2018, that safety came into question when customers learned of a data breach that
reportedly occurred between March and April of that year.
Oddly, though, the company didn't announce the incident until May 12th.
"The company believes malware compromised its payment systems, stealing credit and debit
card information."
Chili's also failed to immediately provide information regarding which locations were
affected.
Security breaches have been making headlines in recent years, because companies seem to
play it fast and loose with clients' information.
In a market where consumers have more choices than money to spend, knowing a company takes
their personal security seriously is a selling point.
If Chili's wants to gain back the trust of their customers, they'll need to be more proactive
with data confidentiality.
These days, eating out feels more wasteful than ever.
From the excessive plastic used in to-go orders, to food waste, people who want to maintain
a green lifestyle can find it difficult to justify eating at most restaurants.
"It's just what you'd expect from Chili's To-Go."
According to a 2018 report by the National Restaurant Association, modern consumers take
sustainability practices into account when it comes to choosing where they dine.
The report claims customers factor in a restaurant's efforts to reduce food waste as well as their
recycling and food donation programs into the decision-making process.
Chili's already made strides in 2016 when they committed to sourcing sustainable seafood.
But if they really want to appeal to consumers, they should lean even more into sustainable
practices like switching to compostable materials for to-go orders and reducing food waste through
prevention, recovery, and recycling methods.
These ideas would generate loyalty among existing customers, and create new opportunities for
marketing to new ones.
Plus, sustainability saves businesses money.
It's a win-win for everyone.
Nobody likes the idea of eating in an establishment with a dirty kitchen.
In September 2018, a Chili's franchise in Winter Haven, Florida had to shut down after
health inspectors found live roaches in the kitchen.
Inspectors reportedly issued a total of 15 violations for issues including old food debris
in microwaves, ceiling tiles leaking rainwater, limescale in the dishwasher, and worse.
"After inspectors saw several roaches crawling next to the salad bin on the cook's line,
and next to the waiter's station."
Since consumers have a wide range of dining establishments to choose from, a single report
of uncleanliness can turn off patrons for the long-term.
While the incident only applies to one out of the hundreds of Chili's locations in the
country, the wide reach of digital news means people can make the assumption that "Chili's
equals Dirty Kitchen."
In order to recover their rep, Chili's has to wait for the incident to fade from people's
memories.
In the restaurant biz, if you snooze, you lose.
Chili's learned that the hard way by waiting too long to implement changes that could've
helped their business.
As The Washington Post points out, their competitor Olive Garden simplified their menu all the
way back in 2014, and Ruby Tuesday did the same in 2016 by cutting thirty percent of
their dishes.
Meanwhile, it took Chili's until 2017 to catch up with the market trend.
"And now we remember the ones we lost."
Considering Chili's successful results, it's clear that making these changes even sooner
would've made a bigger splash.
While American fast-casual restaurants are struggling across the board, Chili's Grill
& Bar has the history and brand recognition to make it out alive.
But in order to stand out as an industry leader, they have to stay ahead of market trends,
not fall behind.