Chili’s, Maggiano’s Parent Company Slows Virtual Brand Growth To Focus On Dine-In

With its newfound focus on off-premise and digital ordering, Brinker International, the parent company of Chili’s Grill & Bar and Maggiano’s Little Italy, is slowing its roll when it comes to growing its virtual brands.

On a call with analysts discussing the company’s Q2 results on Wednesday (Aug. 18), Wyman Roberts, the company’s CEO and president, shared that Chili’s off-premise orders have been holding between 32 and 35 percent of all sales. This is about double the off-premise mix before the pandemic. Additionally, the company’s first virtual brand, It’s Just Wings, is now in more than 1,000 kitchens.

“By leveraging our technological infrastructure, It’s Just Wings surpassed our $150 million target in our company-owned restaurants,” he said. “And along with the support of our franchise partners, It’s Just Wings became more than a $170 million business in the U.S., with many of our international franchisees also now operating the brand.”

The company’s second virtual brand, Maggiano’s Italian Classics, the off-premise-only offshoot of Brinker’s Maggiano’s Little Italy brand, is mid-rollout, now at more than 250 locations. The virtual brand has a pared-down menu, featuring just 10 of the items sold at its brick-and-mortar counterpart. Roberts added that while the conditions of the pandemic made it possible to roll out the wings brand very quickly, Maggiano’s virtual brand has been slower.

“Obviously, our dining rooms are busy again, and we’ve got a lot of things going on in the restaurants … that are requiring us to support our restaurants on a more moderated basis as we roll out this brand,” Roberts noted. “So it’s not going to hit like Wings. It’s going to be rolled out throughout the year.”

Ultimately, however, off-premise channels could prove to be more profitable than dine-in, even once contagion concerns subside on a more permanent basis. For “The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce,” created in collaboration with Carat by Fiserv, PYMNTS  surveyed more than 5,000 U.S. consumers in Q2. The results showed that 61 percent of consumers now order restaurant-made food online, 58 percent are doing so more often than they did before the start of the pandemic and almost half are ordering delivery more than they did before March 2020.

Related news: New Study: Bring-It-To-Me Economy Ascends As Consumers Embrace Home-Centric Lifestyles

Still, 65+ percent of Chili’s sales continue to come from its on-premise business, and presumably a higher percentage of Maggiano’s Little Italy’s sales, though executives did not specify. With this on-premise-weighted mix, the rising COVID-19 numbers could take a significant toll on the company. Already, the seven-day average for daily new cases is more than 10 times higher than it was at the close of the quarter on June 30. Following Brinker’s optimism about dine-in the previous quarter, executives are now more concerned about the threat the Delta variant poses to dine-in.

Read more: Restaurant Chains Rethink Channel Mix For Post-Pandemic Future

“As the Delta variant has kind of picked up some steam here in the last few weeks, we have seen some softening,” said Roberts. “We’re still not quite sure what the timeline is going to be before this thing [the pandemic] gets put back into a place where we’re not seeing consumers having to react and potentially [seeing] more regulation put on restaurants … We’re just being cautious.”