How Chili's Won When America Raged About Fast-Food Prices [View all]
When social-media feeds lit up with complaints about how pricey fast-food meals had become (“By the time you buy a meal for yourself and someone else, you’ve spent well over $20,” one woman said in a TikTok last year.), Kevin Hochman saw an opportunity in the outrage.
The chief executive of the company that owns casual-dining chain Chili’s decided it was time to touch a third rail of restaurant marketing: He compared Chili’s to McDonalds, a surprising tactic since casual-dining chains in the past didn’t consider themselves rivals to fast food. Chili’s diners, the company pitches, get similar burgers to a Big Mac but served at a table with unlimited chips and soda for the same price as a combo meal. And if they are in the mood, a margarita for $6 too.
The average cost of a fast-food burger meal has climbed to $12 from $7.50 in 2019, market-research firm Technomic said. This month, Chili’s is back at it, advertising a new Big QP burger with “85% more beef than a Quarter Pounder with Cheese” for $10.99, a not-subtle reference to one of McDonald’s signature burgers.
For most consumer companies, inflation has been a curse. But Chili’s has found an unusual way to turn inflation into a marketing pitch: since your fast-food burger costs so much, why not go just a little bit more upscale. While casual-dining chains as a group barely eked out a 1% increase in U.S. sales last year, at Chili’s they grew by 15%, Technomic said.
The ads were “like a spark to get people to reconsider coming to Chili’s,” said Hochman, 51, a consumer-products and restaurant-industry veteran. People are saying a fast-food meal at around $16 “is ridiculous,” he said.
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