Why Is Chili’s So Expensive? (10 Reasons)
Chili’s is a casual-dining restaurant that features Tex-Mex food and American cuisine.
Because of its casual nature, the prices at Chili’s tend to be a bit cheaper.
However, if you’ve gone to a Chili’s recently, then you have probably noticed that prices have risen.
Considering Chili’s is still a casual-dining restaurant, you may wonder why it’s become so expensive.
Why Is Chili’s So Expensive? (10 Reasons)
At Chili’s, you can find some menu items for as cheap as $3.
However, other menu items can cost $20 or more.
Certain factors like labor costs, rewards programs, and inflation all contribute to more expensive prices at Chili’s.
Let’s look at these factors in more detail.
1. Labor Costs
Chili’s runs things a bit differently than some other casual-dining restaurants.
A lot of casual-dining restaurants rely on tip culture.
They only pay their servers a few dollars and expect their customers to tip them to make up the rest.
The problem with this culture is that when the economy is in shambles, customers tend not to tip that much.
Casual restaurants also tend to be big among middle-class families.
Those families often struggle to make ends meet.
Paying large tips can be difficult for them.
As such, servers don’t always end up making a lot of money.
Chili’s wants to ensure its servers can pay their bills.
As such, they pay them higher wages than other restaurants.
In particular, a server can earn as much as $9 an hour to even $20 in some locations.
The other positions in the restaurant likely earn even more.
Because they pay higher wages, they have higher labor costs.
To offset those costs, Chili’s has to put higher prices on its menus.
The benefit is that customers don’t feel as much pressure to tip their servers.
They still can if they wish to, but because they’re receiving actual pay, it’s no longer something considered mandatory.
Chili’s is expensive because of the added costs of its increased wages.
2. Turnover
Before Chili’s started paying higher wages, it faced the same problem that a lot of casual-dining restaurants faced.
It had high turnover rates.
Serving at restaurants, in particular, is a difficult job.
You spend your time running back and forth from the kitchen to the tables.
You have to deal with customers both pleasant and unpleasant.
You also have to memorize the different specials going on, a customer’s order, and other elements of the business.
All of this is going on in a fast-paced environment.
Because servers typically don’t get decent pay, they end up finding the hard work not worth the effort.
They move on to other opportunities.
High turnover rates aren’t great for restaurants.
It makes them lose money.
Without enough servers, they’re unable to serve as many people.
Casual-dining restaurants, especially, have a reputation for providing food quickly.
When the food doesn’t arrive fast, people will choose to leave and eat elsewhere.
The restaurant loses money in the process.
Turnover rates also mean that the restaurant has to spend money or time training new employees.
Each time they hire someone new, the training process begins again.
It essentially becomes a lot of wasted money.
Chili’s had a high turnover rate.
In an effort to hold onto employees, it increased labor wages and offered other benefits.
However, in so doing, it also increased its operational costs.
At Chili’s restaurants that are still struggling with high turnover rates, they’re still bleeding money.
In an effort to make up for those added costs or lost money, Chili’s has to charge higher prices.
Chili’s is expensive because of its high turnover rates.
3. Delivery
Following the example of other casual-dining restaurants, Chili’s eventually started working with delivery services.
The pressure of closing its doors during the COVID-19 pandemic led to its delivery services.
Since restaurants were unable to serve people inside the restaurant, they started relying on takeout to make money.
A lot of restaurants didn’t have the means of creating their own delivery service at the time, however.
As such, they partnered with DoorDash,
Working with DoorDash meant that Chili’s had to increase their prices.
That’s because it costs them money to do service with those companies.
They have to pay a certain amount of money for each delivery.
Because that cuts into their profits, they have to sell their dishes at higher prices.
The problem with ordering your food for delivery is that it becomes way more expensive.
For one, Chili’s has to make up for its own costs associated with working with DoorDash.
They put higher prices on their food as a result.
Then you face the different fees from DoorDash.
That usually includes a delivery fee, a service fee, and the number of miles that you have to cover.
As such, if you live far from Chili’s, then you can expect to pay a pretty high fee.
You’re also expected to tip DoorDash drivers since they’re only making around $4 an order.
It’s unlikely that DoorDash drivers will pick up your order if you don’t tip.
It just isn’t worth it to them.
As such, you end up paying a lot of money on top of whatever your order from Chili’s costs.
4. Cover Associate Or GED Costs
To hold onto their servers and other workers, Chili’s has started to offer many benefits to its employees.
One of those benefits is that they’ll cover the cost of getting your GED or Associate’s Degree.
This is a huge investment in their employees.
If you never graduated from high school but wanted to get your GED, then working at Chili’s can make it possible.
Having a GED can unlock more opportunities for you since a lot of employers expect their employees to have, at the very least, a GED or high school diploma.
Those who want to make higher education cheaper can also benefit from getting their Associate’s Degree covered.
The great thing about an Associate’s Degree is that you can get a lot of your general classes done with it.
If you plan on pursuing a Bachelor’s Degree, for example, you’ll find that a lot of the required classes are the same ones you’ll take for an Associate’s Degree.
By knocking them out at a community college, you’ll find that getting your basic education in college is a lot cheaper.
Working at Chili’s means you might not even have to pay a thing.
That’ll let you get a head start on your Bachelor’s Degree since a lot of your general education is already done when you transfer your credits.
It helps make your college education that much more affordable.
The downside is that it means Chili’s is going to have more costs.
While not everyone is going to go after an Associate’s Degree, some will.
That means the company is going to have to spend a couple of thousand dollars for each employee that does claim the benefit.
It makes their expenses that much higher.
To offset those costs and support its employees, Chili’s has to have higher prices on its menu.
5. Rewards Program
Another benefit that Chili’s provides is its rewards program.
If you eat at Chili’s often enough, then you can earn enough points to unlock special rewards.
Usually, that means you get discounted food or even free meals.
Another benefit of the rewards program is that you also get a free dessert on your birthday.
When you sign up for their rewards program, you have to put in your birthday.
If you go to Chili’s on your birthday, then you’ll get a free birthday dessert.
The rewards program also unlocks the ability to get free delivery.
Although you’ll likely still have to pay a tip even if the rest of the delivery is free.
When you qualify to become a Chili’s Regular member, you’re also able to get free chips, salsa, and a non-alcoholic drink as long as you spend $5 or more at the restaurant.
Essentially, the rewards program gets you a lot of free stuff.
While this is great for customers, it means that Chili’s ends up giving up a lot of its food for free.
The more people who come into the same Chili’s location with unlocked rewards, the more food the restaurant is giving away for free.
That can quickly get out of hand and end up making the restaurant lose money.
To ensure that doesn’t happen, Chili’s increases its menu prices slightly.
This ensures that even if a lot of people end up ordering free food, the restaurant is still able to earn enough profit to cover it.
If Chili’s didn’t have a rewards program, then they wouldn’t have to worry about losing out on money as much.
Chili’s is expensive because of the added costs its rewards program brings to the table.
6. Charity
Chili’s understands that, because it earns a good amount of money, it has an obligation to give back to the community.
As such, the restaurant chain has several charitable programs that it donates to regularly.
One of those is St. Jude’s Children’s Hospital.
The hospital focuses on helping children who are suffering from illnesses and conditions.
In particular, it helps children suffering from cancer.
They also launched their own program called Women Take the Lead.
This program offers classes, services, and money to women to start their own businesses or find success in life.
Finally, because its founder, Norman Brinker, was a veteran, Chili’s also gives back to veterans.
Charity usually means that corporations can get significant tax cuts from their finances.
However, it also means that the corporation needs to earn enough revenue to be able to donate to certain charitable organizations in the first place.
Since Chili’s donates to several charities and runs its own philanthropic programs, it means it needs a certain amount of revenue to follow through with those missions.
To ensure it has that revenue, it has higher prices on its menu.
In addition, diners may be more willing to pay higher prices at a restaurant if they know that a portion of their money is going toward a good cause.
7. Large Menu
When you order food at Chili’s, one of the things you’ll notice is the large selection of choices.
Chili’s serves Tex-Mex food and American cuisine.
That means you can find Mexican dishes cooked in an American style or using American flavors.
American cuisine means you can expect to find American staples like burgers and fries.
Having a large menu is great for diners.
It means there’s a good chance that everyone in the family will find something that they want to eat.
The bad thing about having a large menu is that it means you have higher food costs.
A smaller menu means you only need to stock up on certain food staples.
If your menu is large, then you’re going to have to stock up on a lot more food.
Since your food costs are higher, you’re going to need to have higher prices to cover those costs.
8. Large Portions
Another thing that Chili’s is known for is its large portions.
When you buy a burger, you can expect a pretty large patty with lots of toppings.
You can also expect a healthy dose of fries or whatever side you choose.
Large portions make Chili’s expensive because it means you’re getting more food on your plate.
Since you have a lot of food on your plate, the restaurant has lower stocks.
They’ll have to buy more food to cover what they’re missing.
That increases their costs.
Chili’s is expensive because of its large portions.
9. Party Platters
When ordering at Chili’s, one of the benefits you’ll notice is that it serves both small and large parties.
You don’t have to order a separate catering service from Chili’s for a large gathering of people.
You can simply order from their selection of Party Platter items instead.
The Party Platter offers a range of different foods in sizes large enough for a party.
You can get a selection of chicken wings, baby back ribs, eggrolls, sliders, and even simple chips and salsa.
If ordering from the Party Platter menu, however, you can expect very expensive prices.
The menu is for a large group of people.
By splitting it up with those there, you can make it more affordable.
If paying on your own, then the Party Platter menu items are quite expensive.
It’s expensive because of the sheer amount of food you’re receiving.
10. Inflation And Food Costs
A final reason Chili’s is expensive has to do with inflation.
Inflation has caused certain farming processes to become more expensive.
Since food costs are more expensive, it becomes more expensive for Chili’s to source their food.
As a result, they have to put higher prices on their menu.
Inflation even makes things like rent and electricity more expensive.
Chili’s is facing higher costs all around.
As such, to keep their business alive, they have to charge more expensive prices on their menus.
Conclusion
Chili’s is a beloved casual-dining restaurant that serves Tex-Mex and American food.
Several reasons like food costs, labor costs, and other expenses make eating at Chili’s expensive.