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Chili’s Beefs up Advertising as Fast Food Frustrates Diners

Casual dining company Brinker International wants to capitalize on diner discontent with fast food prices.

The company — owner of Chili’s and Maggiano’s — released earnings Tuesday (April 30) showing a 3.3% increase in sales, driven primarily by increased menu pricing and an uptick in dine-in traffic.

To continue driving that traffic, CEO Kevin Hochman said during an earnings call that the company’s advertising efforts are focused on Chili’s value.

“Our social media team has been watching the conversation that the consumer is frustrated by fast food prices,” Hochman told analysts. “Through a series of hard-hitting and entertaining ads, we tap into that insight and use fast food as a foil to demonstrate Chili’s superior value. And those ads literally started yesterday.”

During the question-and-answer session of the call, management was asked about news that McDonald’s could be more aggressive in its promotions. Does that mean Brinker will need to use other deals or campaigns to drive traffic?

“Well, I think the answer is yes,” Hochman said. “So, I think we’ve got to start with just making sure. TV will still be the No. 1 driver of immediate building awareness. I think most marketers know that. And so, we need to continue to stay on TV.”

“We’re using fast food as a foil, mainly because everybody is familiar with the fast-food experience and the pricing,” he added. “And so, it’s an easy foil to use for them to give you relative value. Casual dining is actually a different occasion than fast food.”

Increasing prices at fast food eateries and other restaurants have lower-income diners scaling back. Roughly a quarter of consumers who earn less than $50,000 a year are eating less fast food, while roughly half have cut back on trips to fast-casual and full-service restaurants.

Earlier this month, the Consumer Price Index showed that food consumed away from home — at restaurants — was 0.3% more expensive in March than in February, and 4.2% more costly than the same month in 2023.

While PYMNTS Intelligence data shows that most consumers, no matter their income or demographics, have been spending on restaurants and bars, there is some evidence of pressure on diners in that category too.