Chili's guacamole burger
Chili's plans to raise menu prices.

DALLAS – Street tacos and smoked wings are coming to Chili’s — along with higher prices. Executives of parent company Brinker International, Inc. said the casual-dining chain will increase the cost of menu items in the coming months to stay competitive with such rivals as Applebee’s Neighborhood Grill, Olive Garden and others.

“As we look at the industry, we do see many of our competitors taking larger price increases, and we believe that with our strong value ratings we have room to take additional pricing,” said Wyman Roberts, CEO and president of Brinker, during an April 21 earnings call with financial analysts. “So mid-fourth quarter, we will take a price increase of approximately 1 percent. That will reduce the pricing gap but still keep us conservative compared to the category.”

For the third quarter ended March 25, Brinker had net income of $65,427,000, equal to $1.04 per share on the common stock, up 16 percent from $56,263,000, or 85 cents per share, in the year-ago period.
Revenues totaled $784,215,000, up 3.3 percent from $759,293,000 for the comparable quarter, which included a 2.6 percent increase in Chili’s sales and a 5.8 percent increase in sales at Brinker’s Italian chain Maggiano’s.

Comparable restaurant sales increased 1.9 percent at company-owned Chili’s locations, 0.1 percent at Maggiano’s restaurants, and 2.5 percent at franchised Chili’s units.

Along with price increases comes more menu innovation. During the third quarter, Chili’s introduced new entrees, including ancho chile salmon and grilled avocado steak, plus revamped rib options with new Dr Pepper barbecue and craft beer barbecue sauces.

“Three weeks ago we launched our spring menu featuring new Fresh Mex items like White Spinach Queso and our new Top Shelf Taco category, which includes Ranchero Chicken Tacos and Carnitas Tacos,” Robert said. “The spring menu also built on the Fresh Tex platform, adding new in-house smoked wings; and we eliminated a number of low-selling items that don’t align with our new-school vision, which simplifies our menu, strengthens our culinary point of view, and streamlines our operations, enabling us to focus on areas our guests tell us are most important to them: specifically, speed of service and delivering food at the perfect temperature.”

The chain is set to roll out a loyalty program during the fourth quarter. My Chili’s Rewards offers a fully digital experience across mobile, on-line and tabletop tablet platforms.

“…we feel really good about our continued momentum,” Roberts said. “We’re excited about the upcoming initiatives we shared with you as well as our long-term strategies for the business.”