Texas Roadhouse Just Announced Its Third Price Hike In Less Than a Year
The next time you stop by Texas Roadhouse for a hand-cut steak and one of its signature margaritas, don't be too surprised if your bill is higher than usual.
The chain announced this week that it will roll out a 2.2% menu price increase at the start of the second quarter of 2024, which should begin around late March. During an earnings call with investors on Feb. 15, Texas Roadhouse CFO Chris Monroe explained that the upcoming price hike is meant to "help offset the impact of inflationary pressures" it expects to face in 2024.
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Monroe added that company executives collaborated with restaurant operators to determine how much they should raise prices, considering factors like customer traffic trends, state-mandated pay increases, and prices at other restaurants.
"This level of detail and operator involvement provides us with the confidence that we are taking the right level of pricing without sacrificing our value proposition," he said.
This will be the third price increase that the popular steakhouse chain has implemented in less than a year. Texas Roadhouse hiked up prices by 2.7% in October 2023, which CEO Jerry Morgan said at the time was mainly meant to make up for rising labor costs.
The October increase came just a few months after another 2.2% price boost in April 2023. At that time, Morgan said that the hike was meant to help set up Texas Roadhouse "to achieve a solid year of sales and profit growth while furthering our industry-leading value."
Additional Texas Roadhouse price increases later in 2024 are certainly within the realm of possibility. While inflation rates aren't as severe right now as they were a year ago, prices have continued to tick up month after month. The chain has also been feeling the pain from soaring beef prices due to declines in cattle inventory, an issue that an economist believes will continue to push up beef costs in 2024 and 2025.
So if elevated food and labor costs continue to impact the chain moving forward, customers shouldn't be too surprised chain announces yet another price hike later this year.
Despite the steady increase in Texas Roadhouse's prices, the chain is having no trouble at all bringing customers into its restaurants. It saw an impressive 9.9% increase in same-store sales in the fourth quarter of 2023 and a 5.1% increase in customer traffic. And according to Monroe, Texas Roadhouse's restaurants were "the busiest they've ever been" last year.
"2023 was certainly an impressive year," he said.
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