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Chili's tests barbecue items

New items come as chain expands kitchen retrofits

Chili’s Grill & Bar is testing several “Slow Smoked BBQ” menu items, according to a recent analyst report, as the chain’s 18-month-old “kitchen of the future” program begins to emerge.

Brad Ludington, a securities analyst with KeyBanc Capital Markets Inc., wrote in a research note last week that the casual-dining chain is testing six barbecue dishes through Feb. 7 at nine restaurants in Ohio and Michigan. He said the items being tested include a BBQ Brisket Burger, a Big Mouth BBQ Burrito, BBQ Rolled Quesadillas, a Brisket Sandwich, Smoked Wings and a BBQ Chicken & Shrimp Skillet.

“While we believe this is a very early stage and small initial test, we feel it has the potential to be a more successful individual promotion and promotional strategy than what we have seen in recent years, as it actually focuses on new product innovation rather than a repackaging of existing items,” Ludington wrote.

A spokeswoman at Chili’s would not comment on the report. “At any given time, we are testing multiple platforms,” she said.

The new barbecue offerings come as Chili’s expands its kitchen retrofit program, which is in place in five units so far and is designed to improve food quality and service, while cutting labor costs, Brinker executives have said.

Chief financial officer Guy Constant said in Brinker’s second quarter earnings conference call last week that the company had made year-to-date capital expenditures of $31.8 million, which includes the second phase of the kitchen retrofit program.

“Our plan is to expand from this lab phase on to the test phase by installing new equipment into an additional 10 to 15 restaurants in the late part of the third quarter,” Constant said.

A recent Wall Street Journal report said the kitchen revamp includes new ovens that can both cook and smoke as well as conveyor-belt technology that reduces labor.

Brinker also recently hired Ian Baines, former president of the Smokey Bones chain, to serve as senior vice president of strategic innovation and “manage the kitchen retrofit process,” said Doug Brooks, Brinker’s chairman, president and chief executive.

Last week, Brinker reported second-quarter profit more than doubled with stronger margins and lower costs, though same-store sales at Chili’s continued to lag, with a 4.9-percent decline.

EARLIER: Brinker doubles 2Q profit on lower costs

Contact Ron Ruggless at [email protected].

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