Texas Roadhouse Might Raise Prices Again In October
Texas Roadhouse has soared in popularity this year. But the chain's strong performance and major foot traffic may not be enough to prevent another price increase later this year.
The company just reported a 9.1% increase in same-store sales and a 4.7% increase in customer traffic in the second quarter of 2023. These strong quarterly earnings followed a stellar first quarter for Texas Roadhouse, which brought in record guest counts and an impressive 12.9% increase in same-store sales.
"There is no doubt that our guests continue to support our commitment to serving made-from-scratch food in a fun and friendly atmosphere," the chain's CEO Jerry Morgan said during an earnings call last week.
While the chain has been on quite a sales streak, its profit margins have been a different story. Elevated costs for labor and beef have been shaving away at Texas Roadhouse's restaurant-level profits. And if things continue to get worse, customers may have to foot the bill for those inflated costs.
During the recent earnings call, an analyst asked if Texas Roadhouse would consider raising its prices to offset the elevated costs—and Morgan didn't rule out the possibility.
"We will continue to monitor it," he said of the beef prices. "It's a big part of our menu. It is the cost of doing business right now. We do need to be very cautious and careful on the pricing to make sure that we are continuing to drive our value component and then deliver on the experience."
Texas Roadhouse will start working with its operators soon to decide on any potential price increases, Morgan said. However, he didn't offer any hints on just how much prices could go up if the company decided to raise them. Texas Roadhouse did not immediately respond to our queries for more details on the potential price increases.
If Texas Roadhouse does decide to raise its prices in October, it will be its second price boost in recent months. The company raised prices by 2.2% at the start of the second quarter of 2023. While 2.2% may not seem like a massive change, any price increase for a chain known for its affordability is still notable.
Customers can hold out hope that Texas Roadhouse's beef and labor prices ease over the next few months. If not, they might have to make their peace with paying a little extra for their steak dinners in the near future.
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