Texas Roadhouse May Raise Prices Again This Year
One of America's most beloved casual steakhouse chains—Texas Roadhouse—has hiked its prices a notable three times since the spring of 2023. Before the end of this year, customers could very well see their dinner bill become even pricier.
A potential price hike was one of the hot topics during Texas Roadhouse's latest earnings call with investors on July 25. CFO Chris Monroe revealed that they'll soon begin talking with their operators about possibly raising prices at the start of its fourth quarter later this year to offset their own rising costs.
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One of the chain's major draws is its affordable price points compared to some of the higher-end steakhouse chains. So, Monroe said they want input from the people who run their restaurants about whether they can raise prices without compromising their affordability.
"In the coming weeks, we will have our normal discussions with our operators regarding the amount of menu pricing we may take at the beginning of the fourth quarter. We will continue to follow our disciplined process of focusing on maintaining our value proposition while balancing the impact of structural inflationary pressures."
While Texas Roadhouse hasn't officially decided on the price increase yet, such a move seems likely given the current state of the industry for its signature dish: steak. Beef prices have been on the rise due to strained cattle numbers, which can put financial strain on a chain that heavily relies on the popular protein, such as Texas Roadhouse.
Company executives said that cattle supplies and beef costs were actually better than expected during the first half of 2024. However, they expect supplies and costs to worsen during the second half of the year—a factor that will certainly play into their decision on whether to hike menu prices to offset inflation.
"We're obviously expecting to feel more pressure from that in the back half of the year," Michael Bailen said in reference to the expected beef supply issues.
If Texas Roadhouse does end up raising its prices again before the end of 2024, it will be the fourth hike since last April. The chain increased prices by 2.2% in April 2023, by 2.7% in October 2023, and by 2.2% at the start of its second quarter in 2024.
While other restaurant chains that have gotten pricier have faced staunch criticism from fans, Texas Roadhouse customers don't seem bothered by the rise. The company reported a 9.3% increase in same-store sales in the second quarter and a 4.5% increase in customer traffic.
"Our guests continue to recognize the quality and value we offer and do not appear to be changing their dining habits," CEO Jerry Morgan said.
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