Industry analysts say Chili's should shift its focus from burgers to burritos if the chain wants to recapture customers.
Brinker International , which released its fourth quarter results today, has positioned Chili's as a family-friendly watering hole. The Associated Press reported,"Excluding discontinued operations and one-time items, Brinker's profit amounted to 44 cents per share for the three months ended June 30." That's 2 cents per share less than analysts' predictions.
Nation's Restaurant News quotes UBS analyst David Palmer citing an "opportunity for Chili's to move its brand away from the grill-and-bar pack, and perhaps invigorate the Tex-Mex attributes of its brand."
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While Chili's has borrowed heavily from Tex-Mex traditions since 1975, when it opened its first store in a converted Dallas post office, burgers have always been central to Chili's menu. The first restaurant was officially known as "Chili's Hamburger Grill and Bar."
Chili's this summer ran a series of burger promotions, dropping the price of its Old Timer to $5.99 and debuting a burger topped with Shiner Bock barbecue sauce. According to the Nation's Restaurant News report, the specials didn't seem to generate any additional traffic for the chain's 1,500 outlets.
"We believe future promotions could feature more unique items and less mainstream products (e.g. burgers)," Palmer advised.
A Chili's spokesperson did not return calls seeking comment.