Skip to content

America's Largest Steakhouse Chain Might Get More Expensive, Again

While sales are soaring, so are food and labor prices.

Steakhouses are a prominent part of the American dining out culture, but that is hardly the only reason why Texas Roadhouse, America's largest steakhouse chain, keeps soaring in popularity this year.

The chain had a tremendous start to their year. In the first quarter, it reported an increase in same-store sales of 18.5% at company-owned restaurants compared to 2020, as well as an 8.6% growth compared to the pre-pandemic 2019. And the newly published second quarter results, which ended at the end of June, show an even greater growth of 80.2% compared to 2020 and 21.3% compared to 2019.

During the pandemic, Texas Roadhouse's shift to off-premise business, which up until then made up a very small portion of their sales, was successful, and fast. The chain is now seeing a healthy mix of dine-in and to-go orders, as well as growing check averages as customers who are dining on-premises spend more money on appetizers and alcoholic and soft drinks.

But the chain's leadership warned of a new hurdle that's plaguing the business—an increase in labor and food costs. As a result, the chain said their prices may end up increasing again later this year, for the third time in recent months. And for more, check out 6 Restaurant Chains That Just Got More Expensive.

1

Higher demand and intermittent shortages

texas roadhouse exterior
Texas Roadhouse/ Facebook

Thanks to a huge demand for their food, as well as national food shortages affecting food businesses across a wide spectrum, the chain is having to purchase meat and other goods outside of their regular suppliers and their set prices.

The chain's CFO Tonya Robinson said the chain's suppliers are facing similar issues and are "starting to pass those costs on that they're feeling."

According to FSR Magazine, this has led Texas Roadhouse to purchase more expensive beef, for example, which could mean that customers will face yet another price increase at the chain this year.

RELATED: Don't forget to sign up for our newsletter to get the latest restaurant news delivered straight to your inbox.

2

Higher costs of food

texas roadhouse bloomin onion
Texas Roadhouse/ Facebook

In an earnings call last week, the chain said they expected their food costs to increase by 7%, up from the 4% anticipated earlier in the year.

3

The chain has been increasing prices since 2020

texas roadhouse interior
Texas Roadhouse/ Yelp

So far, Texas Roadhouse has increased prices on two separate occasions in recent months. A 1.4% increase was implemented at the end of 2020, while another 1.75% bump was added in May. Currently, the chain's prices are about 2.8% higher than they were in early 2020.

4

Another price increase could take place later this year

texas roadhouse steak and shrimp
Texas Roadhouse/ Facebook

According to FSR Magazine, if the chain decides on another price increase, it will likely take place in October and will clock in at about 2.9%.

For more, check out the 108 Most Popular Sodas Ranked By How Toxic They Are.

Mura Dominko
Mura is a Deputy Editor leading ETNT's coverage of America's favorite fast foods and restaurant chains. Read more