Texas Roadhouse Could Soon Become the Largest Restaurant Chain In America
To say Texas Roadhouse is having a stellar year would be an understatement. The popular steakhouse chain started off 2023 with seven weeks of record foot traffic as it continues to draw in guests with its affordable steaks, massive margaritas, and fun atmosphere. Review site Yelp also recently named Texas Roadhouse as the second most loved restaurant brand in America, only coming behind breakfast and brunch chain First Watch.
Texas Roadhouse's future only looks more promising in light of newly-released data on top restaurant brands, so much so that an industry expert just predicted that it could become the largest full-service restaurant chain in America.
Technomic, a consulting and research agency that focuses on the food service industry, recently released its 2022 ranking of the top 500 chain restaurants in the United States by sales. Texas Roadhouse was the third-largest full-service restaurant chain in the ranking, coming behind the first-place Olive Garden and second-place Applebee's, Restaurant Business Magazine reported.
But Kevin Schimpf, director of industry research and insights for Technomic, thinks that Texas Roadhouse has the potential to surpass those two casual dining competitors. Though Texas Roadhouse came in third, its 2022 sales grew at a higher percentage than the chain that took first place: Olive Garden's sales increased 12% to $4.7 billion, while Texas Roadhouse's sales increased 13% to $4.2 billion.
"Texas Roadhouse could become the largest full-service chain soon over Applebee's and Olive Garden," Schimpf said, according to Restaurant Business Magazine. "They could pass those chains in the next few years."
This is just the latest indication that Texas Roadhouse might be on its way to casual dining superiority. Brand Finance, a brand valuation consultancy, named the steakhouse chain as the fastest-growing restaurant brand in 2023 last month. Brand Finance looks at factors like revenues and royalty rates to calculate a brand's value, and determined that Texas Roadhouse had already seen a 56% value increase in 2023.
Texas Roadhouse also has some ambitious plans for unit growth on the horizon. The company operated 652 Texas Roadhouse restaurants in the United States and foreign countries as of December 2022, but it is aiming to expand to 900 locations in America alone. This growth will only give the company more opportunities to rake in sales and potentially catapult itself to the top of the full-service dining ranking.
Texas Roadhouse restaurants generated an average of $6 million in sales in 2021, the highest out of all others in the casual dining sector, Restaurant Business Magazine reported. If Texas Roadhouse continues to see average unit volumes of $6 million after reaching 900 units, the chain could potentially generate $5.4 billion annually and become the largest casual dining chain by sales.
Whether and when Texas Roadhouse will actually get to 900 units remains to be seen, since the company hasn't provided a timeline for the growth. But considering the brand's recent track record, it may not be wise to bet against it.