In the last part of this series, we learned that Chili’s launched new items on its menu. These innovations require effective marketing campaigns to spread awareness about the menu changes.
During the quarter, Chili’s launched marketing campaigns. The campaigns focus on the concept of “fresh” at Chili’s restaurants. The TV ads show the re-imaged restaurants, the Ziosk table top ordering system, Table-Side Guacamole, its new Craft Burgers, and its house-made pickle items.
The campaign is called “Fresh is Happening Now.” It covers digital, social, and national TV exposure for the brand. According to the company, the campaign is helping customers understand the company’s vision.
Managing perception is very important. A negative image can damage a restaurant. McDonald’s (MCD) faced negative publicity in 3Q14 in China. As a result of the issue with the meat supplier, it will take six to nine months for sales to stabilize in the market.
MCD is included in the Consumer Discretionary Select Sector SPDR Fund (XLY). XLY gives investors exposure to several restaurant stocks—like Yum! Brands (YUM), Chipotle Mexican Grill (CMG), and Darden Restaurants (DRI).
Focusing on “fresh”
Millennials are a big opportunity for restaurant companies. However, this group has different eating habits. Chili’s management answered this demographic group. It’s offering items that are prepared fresh.
In our second quarter earnings series, we discussed the company’s efforts to implement a digital tabletop ordering system—Ziosk—at Chili’s. The device allows customers to order food and beverages. They can also entertain themselves while they wait for the food to arrive. Customers can even use the device to pay for their meal.
During the second quarter, the company finished installing Ziosk in its company-owned restaurants. The company stated that all of its domestic franchise restaurants will also have Ziosk installed.
All of the above initiatives will help the company grow its same-store sales. In the next part of the series, we’ll discuss unit growth. Unit growth is another key driver that increases a restaurant’s revenues.