Just a year ago, casual dining chains like TGI Fridays and Red Lobster were filing for bankruptcy. Now a resurgence is underway, with Chili's leading the charge. Call it a babyback comeback.
Chili's has "become the poster child" for the resurgence of casual dining restaurants, said The Wall Street Journal. The company reported a 24% annual increase in same-store sales last quarter from a year earlier, thanks to a "widening value gap." While "eating out has become more expensive everywhere," the price increases have been less steep and noticeable at sit-down restaurants, allowing them to "play offense" in the race to attract diners. The result? A "Chili's effect" that is spreading even to restaurants like Applebee's, which is seeing quarterly sales growth "after eight straight declines." Bottom line: "The Chili's economy is here."
The restaurant is also "enjoying a TikTok-fueled renaissance" thanks to Gen Z customers, said Texas Monthly. That is intentional: Chili's "regularly partners with content creators" for viral videos designed to appeal to young consumers. Other ingredients of the newfound success include a slimmed-down menu, the broad appeal of the chain's $10.99 "3 for Me" deal and a marketing surge that saw the company triple its spending on advertising, said CNBC. Customers "appreciate that they don't need a coupon or an app to get a meal deal."
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"The restaurant industry in 2025 is the most competitive I've ever seen," said Jonathan Maze at Restaurant Business. Americans are "demanding higher quality" from restaurant chains, "ignoring pure price for what they consider value." That suggests the path to success is to "invest and win over customers." When the company was struggling, Chili's CEO Kevin Hochman "fixed the products, then used innovative marketing to get people in the door." Restaurants that choose instead to "cut corners" will "lose in an environment like this."
"Chili's may not be the best restaurant in America — but it is the exact restaurant America needs right now," said Dan Kois at Slate. By cutting menu items and focusing on basics like "burgers, fajitas, appetizers, margaritas, ribs," Hochman steered the chain toward delivering "big, popular things to the big, fat American middle." It will not compete with non-chain restaurants "for trendy foods or challenging flavors," or healthiness, for that matter. But the "key to the revolution at Chili's has been embracing what Chili's actually is," which is "America's most middlebrow casual restaurant."
What next?
Chili's is not the only casual-dining chain on the upswing. In April, Texas Roadhouse surpassed Olive Garden as "America's number one dining location," said Yahoo Finance. But there are also struggles within the sector: The Florida-based parent company of Bravo! Italian Kitchen and Brio Italian Grille filed for Chapter 11 bankruptcy on Aug. 18, said Nation's Restaurant News.
Expansion is the next step for Chili's. The chain wants to expand to regions with "few or no Chili's, such as parts of the Northeast and Pacific Northwest," said Bloomberg. Hochman's other goal is to upgrade the menu. "The next frontier is steak."
