Chili’s parent company, Brinker International, has seen a significant increase in sales and traffic due to a promotion of a new burger that competes with fast food options. Customers have expressed frustration with the rising prices of fast food, prompting Chili’s to offer a $10.99 meal deal that includes the Big Smasher, described as having “twice the beef of a Big Mac.” While the Big Smasher does not have two patties like the Big Mac, it offers a half-pound slab of meat with similar toppings.
Chili’s has outperformed fast food competitors like McDonald’s, Burger King, and Wendy’s in both sales and traffic, thanks to its new advertising campaign. The promotion for the Big Smasher has been successful in driving traffic and tapping into the cultural conversation about fast food prices. Brinker International CEO Kevin Hochman stated that the promotion will continue for the rest of the year, as it has been well-received by customers.
Applebee’s has also focused on value-based deals, offering a burger for $9.99 as a competitive option to fast food deals. CEO of Applebee’s parent company Dine Brands, John Peyton, highlighted the similarities in pricing between fast food and sit-down restaurants, emphasizing the added value of a table service experience. By pointing out the price overlap, restaurants like Applebee’s aim to attract customers looking for a different dining experience.
Following Chili’s success with their promotion, McDonald’s, Burger King, and Wendy’s have all launched their own deals to compete. McDonald’s $5 promotion has been particularly successful, prompting customers to return to the restaurant and even purchase full-priced items, resulting in increased sales. Despite its success, Chili’s results were not enough to boost Brinker International’s stock, with shares dropping by 11% due to profits falling below analyst expectations.
The shift in consumer preferences towards sit-down restaurants like Chili’s and Applebee’s can be attributed to the value-based promotions that offer competitive meal deals in comparison to higher priced fast food options. By recognizing the frustration with fast food prices and offering alternatives like the Big Smasher and $9.99 burgers, these restaurants have been able to attract customers seeking affordable dining experiences with the added benefit of table service. This new approach to pricing and promotions has sparked a competitive landscape among fast food and sit-down restaurants vying for customer attention and loyalty.
