Marketing and advertising recap
It’s not just menu innovation, as we saw in the previous part of this series, that’s important for restaurants such as Brinker International (EAT), Darden Restaurants (DRI), McDonald’s (MCD), Yum! Brands (YUM), and those included in the Consumer Discretionary SPDR fund (XLY). Marketing strategy is also important.
The above image shows advertising expenses as a percentage of sales for companies as of fiscal 2013.
Brinker (EAT) has been trying to differentiate itself by focusing on communicating the brand message—especially at Chili’s. According to EAT, this is different from focusing on limited one-time offers like those its competitors run to attract customers.
“Fresh is Happening Now” was one of the marketing initiatives the company launched during the year. Under this campaign, the company has focused on advertising house-made pickles, Craft Burgers, and Table-Side Guacamole.
Using television shows to attract customers
EAT has also premiered a reality show with home cooks competing to create a new burger that will feature on Chili’s menu. According to the company, the winning burger was available at its restaurants “in less than 12 hours” as soon as it aired on the show.
Chipotle Mexican Grill (CMG) also aired a similar satirical television series that criticized the industrial farming of animals.
Improved same-store sales growth reflects the success of this strategy.
Next, we’ll discuss digital integration at Chili’s restaurants.