America's Largest Steakhouse Chain Just Increased Its Prices
America's largest steakhouse chain is seeing customers flock back to its locations as COVID-19 dining restrictions begin to ease across the country. In fact, Texas Roadhouse is so popular that it can afford to raise its prices.
The chain serving Texas-style fare with a back-road feel has just reported soaring sales numbers for the first quarter of the year. Company-owned steakhouses are up by 18.5% in same-store sales compared to the same time period last year, and 8.6% up compared to 2019.
Thanks to the huge demand, the chain has had to extend its hours of operation at 200 or so of its reopened restaurants, according to the chain's CFO Tonya Robinson.
"We've got probably 200 or so restaurants that have opened earlier. They're opening at 3 [p.m.] versus 4 [p.m.]," Robinson said on a recent earnings call.
Another change the chain is implementing is an increase in prices. Robinson said the company raised its menu prices by 1.4% so far this year, and is ultimately looking to land at 1.75% increase to offset some of the new financial pressures the company and its operators are feeling due to an increase in workers' wages. Fast-food and fast-casual chains across the industry are having trouble hiring back enough staff post-pandemic, and an increase in wages is one way businesses are trying to stay competitive in hiring.
But the price increases don't seem to be deterring guests who visit Texas Roadhouse locations—check averages are up 5.5% during the first quarter, and the chain's to-go sales are still going strong. Guests are spending more on both food and alcohol.
"You're seeing guests trading up to higher-priced steaks and items, entrées on the menu, bigger steaks," said Robinson. "You see that alcohol mix coming back into play as the dining rooms reopen, all those things really playing into what's driving a lot of that sales momentum that we saw in March and April."
For more on the latest fast-food trends, check out This Beloved Pizza Chain Is Opening 200 New Locations This Year, and don't forget to sign up for our newsletter to get the latest restaurant news delivered straight to your inbox.