Chili's 2014 Annual Report Download - page 10

New York’s Little Italy in the 1940s. Our Maggiano’s restaurants feature individual and family-style menus, and
most of our restaurants also have extensive banquet facilities designed to host large party business or social
events. We have a full lunch and dinner menu offering chef-prepared, classic Italian-American fare in the form of
appetizers, entrées with bountiful portions of pasta, chicken, seafood, veal and prime steaks, and desserts. Our
Maggiano’s restaurants also offer a full range of alcoholic beverages, including a selection of Handcrafted
Classic Cocktails and premium wines. In addition, Maggiano’s offers a full carryout menu as well as local
delivery services.
During the year ended June 25, 2014, entrée selections ranged in menu price from $12.95 to $42.50. The
average revenue per meal, including alcoholic beverages, was approximately $26.72 per person. During this
same year, food and non-alcoholic beverage sales constituted approximately 83.0% of Maggiano’s total
restaurant revenues, with alcoholic beverage sales accounting for the remaining 17.0%. Sales from events at our
banquet facilities made up 19.4% of our total restaurant revenues for the year. Our average annual sales volume
per Maggiano’s restaurant during this same year was $8.81 million.
Business Strategy
We are committed to strategies and initiatives that are centered on long-term sales and profit growth,
enhancing the guest experience and team member engagement. These strategies are intended to differentiate our
brands from the competition, reduce the costs associated with managing our restaurants and establish a strong
presence for our brands in key markets around the world.
Key economic indicators such as total employment, spending levels and consumer confidence continued to
improve steadily this fiscal year; however, the casual dining industry has continued to experience soft sales and
traffic. Historically low interest rates have diverted consumer discretionary spending to bigger ticket items and
housing. U.S. economic growth subsequent to the recession has been steady; however, wage growth has been
slow. This slow recovery has challenged the restaurant industry and consumers since 2009 and as a result, our
strategies and initiatives have been developed to provide a solid foundation for earnings growth going forward
and are appropriate for all operating conditions.
Our current initiatives are designed to drive profitable sales and traffic growth and improve the guest
experience in our restaurants. We have invested in upgraded kitchen equipment, operations software and reimage
initiatives as components of our strategy.
The upgraded kitchen equipment has enabled us to provide a higher quality product at a faster pace,
enhancing both profitability and customer satisfaction. We believe the usability and efficiency of the equipment
will result in substantial labor savings over time. Also, the flexibility of our equipment allows for the
development of new menu categories that we believe will provide opportunities for sales and customer traffic
growth.
All company-owned Chili’s and Maggiano’s restaurants are now operating with an integrated point of sale
and back office software system that was designed to enhance the efficiency of our restaurant operations and
reporting capabilities. Timely and more detailed reporting in our restaurants has improved inventory and labor
management while reducing software maintenance costs. Additionally, our management team will have more
timely visibility into operating performance and trends which will enhance decision making and improve
profitability.
We have also leveraged technology initiatives to drive traffic and enhance the guest experience in our
restaurants. All company-owned Chili’s restaurants are now outfitted with Ziosk table top devices which gives us
the largest network of tabletop devices in the country. Ziosk is a multi-functional tablet which provides
entertainment, ordering, guest survey and pay at the table capabilities. We plan to build on this momentum by
investing in additional technology initiatives including upgrades to our on-line ordering and mobile platforms.
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