There
is an important lesson emerging from Chili’s
that reaches far beyond burgers, chicken sandwiches, tacos or even casual
dining according to Steven Johnson
Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Consumers
do not live in restaurant industry silos—and neither should restaurant
marketers.
For
decades, the restaurant industry has divided itself into categories:
quick-service restaurants, fast casual, casual dining, pizza, Mexican, chicken,
burgers and convenience stores. But consumers do not wake up in the morning
thinking, “Today I am going to purchase from the casual-dining segment.”
They
think:
“What
do I want to eat, how much do I want to spend, how quickly do I want it, and
what am I going to get for my money?”
That
distinction is becoming increasingly important.
And
Chili’s appears to understand it.
At
Brinker International’s September 17, 2026 Investor Day, Chili’s executives Kevin Hochman, president
and CEO of Brinker International, and George Felix, EVP and CMO, described a
strategy that began by attacking the perceived value gap between casual dining
and fast food—and is now looking toward Mexican QSR as another category where
Chili’s believes it can compete.
From
the perspective of the Grocerant Guru®, this isn't simply a story about Chili’s going after Taco Bell.
It
is a story about the continuing collapse of restaurant industry silos.
The Consumer Doesn't Care About Your Industry Category
In
2024, Chili’s made its intentions very clear.
The
brand introduced its Big Smasher burger as part of its $10.99 3 For Me
platform, explicitly positioning the offer against fast-food burgers. Chili’s
said the Big Smasher contained twice the beef of a Big Mac, while the $10.99
meal included the burger, fries, bottomless chips and salsa, and a bottomless
non-alcoholic beverage.
The
important marketing idea wasn't simply “we have a burger.”
The
message was:
“Compare
what you get for your money.”
That
is a fundamentally different way to market food.
Chili’s
subsequently extended the strategy into lunch. Its 2024 3 For Lunch platform
offered 11 combinations beginning at $10.99, including burgers, chicken
sandwiches, chicken tenders and other familiar lunch choices.
Then
came 2025.
Chili’s
introduced the Big QP burger with 85% more beef than a Quarter Pounder with
Cheese, again putting the comparison squarely into the consumer's frame of
reference. The $10.99 3 For Me included the burger, fries, bottomless chips and
salsa, and a bottomless drink.
And
the results suggest that consumers were paying attention.
For
fiscal 2025, Chili’s comparable restaurant sales increased 25.3%, with traffic
up 16.0%. In the fourth quarter alone, comparable sales increased 23.7%,
including a 16.3% increase in traffic.
Those
numbers matter because they demonstrate something more important than a
successful advertising campaign:
Consumers
were willing to change where they spent their restaurant dollars.
Then Came Chicken
In
April 2026, Chili’s moved beyond burgers.
The
company introduced the Big Crispy chicken sandwich to its $10.99 3 For Me
platform and explicitly compared it with fast-food chicken sandwiches. Chili’s
said its average Big Crispy filet was more than 80% larger than the average
McCrispy breaded filet in its local study.
Again,
the strategy wasn't:
“We
are a casual-dining restaurant selling chicken.”
It
was:
“Here
is what you get for your money. Now compare.”
That
is Price Value Service Equilibrium in action.
Price
alone isn't value.
Value
is the relationship between:
Price
+ Quality + Service + Experience + Portability = Consumer Value
A
$9 meal isn't automatically a better value than a $12 meal.
If
the $12 meal provides substantially more food, better ingredients, table
service, a comfortable environment and an experience consumers enjoy, the
consumer may perceive the $12 purchase as the better value.
That
is exactly the battleground Chili's has entered.
Chili's Says Mexican QSR Is Next
At
the 2026 Investor Day, Brinker executives discussed Mexican QSR as a potential
future growth category.
Importantly,
this is not being positioned as an immediate rollout. George Felix described
Mexican QSR as a future opportunity, potentially about two years out, while
pointing to existing Chili's capabilities in quesadillas and fajitas.
Executives discussed potential extensions such as Chicken Crisper tacos,
upgraded steak quesadillas and other Mexican-inspired menu applications.
That
is strategically significant.
Chili's
isn't starting from zero.
It
already has:
·
Chicken Crispers
·
Fajitas
·
Quesadillas
·
Mexican-inspired menu items
·
Familiar proteins
·
Sauces and flavor profiles
·
A strong restaurant experience
·
A value platform
·
A marketing system built around
comparison
The
opportunity is therefore less about entering Mexican food and more about recombining
existing assets into new consumer occasions.
That
is something the Grocerant Guru® has been calling Mix-and-Match Meal Component
Bundling for years.
Take
a proven protein.
Take
a proven sauce.
Take
a familiar format.
Take
a recognized brand.
Bundle
the components.
Create
a new occasion.
Then
give the consumer a reason to choose it.
This Is Where the Silos Begin to Break
The
restaurant industry has traditionally organized itself around categories.
Burger
restaurants compete with burger restaurants.
Chicken
restaurants compete with chicken restaurants.
Mexican
restaurants compete with Mexican restaurants.
Casual
dining competes with casual dining.
But
the consumer sees none of those walls.
The
consumer sees one wallet.
And
that wallet may be deciding between:
·
a burger at McDonald's,
·
tacos at Taco Bell,
·
chicken at Chick-fil-A,
·
a meal at Chili's,
·
pizza for the family,
·
a prepared meal from a supermarket,
·
food from a convenience store,
·
or something delivered to the home.
That's
the real competitive landscape.
The
consumer's stomach is the marketplace.
The Chili's Numbers Tell an Interesting Story
Chili's
fiscal 2024 performance already showed the beginning of the shift.
In
fiscal 2024, Chili's comparable restaurant sales increased 7.4%, while traffic
declined only 0.6%, with the company specifically citing the Big Smasher launch
and value-oriented advertising as traffic drivers in the fourth quarter.
Then
fiscal 2025 accelerated dramatically.
Chili's
comparable sales increased 25.3%, with traffic increasing 16.0%.
By
fiscal 2026, Brinker reported that Chili's had delivered five consecutive years
of same-store sales growth, with cumulative growth of 71% over that period.
Fiscal 2026 fourth-quarter comparable sales increased 5.6% at Chili's.
Those
results help explain why Brinker is now talking about expanding the concept
rather than simply defending it.
At
Investor Day, Brinker established longer-term targets calling for 4% to 6%
annual revenue growth and 2% to 3% annual unit growth, with a goal of reaching
approximately 30 new restaurants annually by fiscal 2029.
Value Is Becoming More Than a Discount
This
is perhaps the most important lesson.
Chili's
executives are not describing value as simply having the lowest price.
They
describe an everyday low-price strategy based on price certainty, more food for
the money and the overall experience.
The
company's executives said the Chili's entry price points can be available
without requiring consumers to find a coupon, visit at a specific hour or use a
special promotion. They also described the average Chili's check for comparable
occasions as roughly $3 to $4 below competitors in casual dining.
That
is a very different proposition from traditional promotional marketing.
“Come
in today because the coupon expires tonight” creates urgency.
“You
know what you're going to get for your money every day” creates trust.
For
today's consumer, that distinction matters.
And This Is Where Taco Bell Enters the Conversation
The
question isn't really whether Chili's can become Taco Bell.
It
doesn't need to.
Nor
does Taco Bell need to become Chili's.
The
more interesting question is whether consumers will increasingly compare them
on the same occasion.
If
a consumer wants tacos, the consumer can evaluate Taco Bell.
But
that same consumer can now ask:
What
does Chili's offer me for the same money?
That
is the competitive disruption.
Chili's
executives have already indicated that the company intends to make comparisons
visible by showing consumers the difference in portion size, ingredients and
experience.
And
that is exactly how category boundaries begin to disappear.
The Bigger Opportunity Is the Occasion
The
restaurant industry should stop asking:
“Who
is our competitor?”
It
should start asking:
“What
other food occasions can steal our customer's dollar?”
That
is a much larger question.
A
burger chain isn't only competing against burger chains.
A
Mexican QSR isn't only competing against Mexican QSRs.
A
casual-dining restaurant isn't only competing against casual dining.
They
are all competing for share of stomach, share of wallet and share of occasion.
Brinker
executives made essentially this point at Investor Day, noting that Chili's can
source guests from across the restaurant landscape rather than from one
specific category.
That
is the future of foodservice marketing.
The Grocerant Guru® Perspective
I
have long argued that there are no silos in the consumer's mind.
Consumers
don't care whether the food industry calls something QSR, fast casual, casual
dining, convenience retail, grocery prepared foods or a restaurant.
They
care about what's for dinner.
They
care about what's for lunch.
They
care about how much it costs.
They
care about how much food they receive.
They
care about quality.
They
care about speed.
They
care about service.
And
increasingly, they care about whether the experience is worth leaving home for.
Chili's
is demonstrating what happens when a restaurant stops defining its competition
by industry classification and starts defining competition by consumer value
perception.
The
next phase may be Mexican QSR.
But
the larger opportunity is much bigger.
It
is the consumer.
And
the consumer has never recognized the silos in the first place.
Three Insights from the Grocerant Guru®
1. Stop defining competition by category.
The
restaurant industry needs to stop asking, “Who operates in our category?”
and start asking, “Who is competing for this consumer's next meal?” That
includes restaurants, grocery prepared foods, convenience stores, delivery,
takeout and increasingly every retailer capable of selling Ready-2-Eat or
Heat-N-Eat food.
2. Price gets attention—but value wins the occasion.
Chili's
lesson is not simply that $10.99 is powerful. The lesson is that what the
consumer receives for $10.99 creates the value proposition. Food quantity, food
quality, service, atmosphere, convenience and price must work together. That is
the Price Value Service Equilibrium.
3. The future belongs to Mix-and-Match.
Chili's
potential move into Mexican QSR demonstrates the power of using existing
foodservice components in new ways. Chicken Crispers can become tacos. Fajita
steak can become quesadillas. Sauces can create new flavor platforms. Existing
ingredients can create new occasions.
That's
Mix-and-Match Meal Component Bundling—and it is one of the most powerful ways
to grow food sales without rebuilding the entire business from scratch.
The
biggest lesson from Chili's isn't that casual dining is going after Mexican
QSR.
The
biggest lesson is that the consumer has already eliminated the silos. The
smartest food marketers are simply catching up.
Tap into the Foodservice Solutions® team for greater
understanding of New Electricity or for a Grocerant Program Assessment,
Grocerant ScoreCard, or for product positioning or placement assistance, or
call our Grocerant Guru®. Since 1991 www.FoodserviceSolutions.us of Tacoma, WA
has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869
