News about chain restaurants may center on the struggles of longtime favorites like Red Lobster and the crumbling TGI Fridays, but Texas Roadhouse bucks that trend. The company is more than just America’s fastest-growing steakhouse. Brand Finance’s 2023 report states that it is the fastest growing restaurant brand in the world. According to Food & Wine magazine’s 2024 Technomic Top 500 Chain Restaurants report, Texas Roadhouse’s sales are expected to increase in 2022 and 2023, despite declines for many of its casual dining competitors nationwide. We found that both increased by more than 15%. With over 700 locations as of this writing and plans to reach 900 in the next few years, the steakhouse has become one of the 20th largest restaurant chains in the United States. That’s pretty surprising for a business that sells luxury items like steak at a time when many people are cutting back on spending. While there are always many reasons for a company’s success, Texas Roadhouse’s secret appears to be a combination of unparalleled value and high customer satisfaction.
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Steakhouses are an American favorite, and rivals like Longhorn and Outback are doing well, but neither can compete with Texas Roadhouse’s prices. Despite using high-quality USDA Choice beef cuts, the chain manages to keep its meals more affordable through a combination of careful business practices. Texas Roadhouse bucks most trends by entering into long-term, fixed-price contracts with its beef suppliers. Prepaying is more expensive, but protects you from volatile and rapidly rising costs. But good deals with suppliers are only one part of a comprehensive strategy to keep fees low.
This chain uses upsells and affordable real estate to keep steak prices reasonable
Unlike many chains, Texas Roadhouse is not typically open for lunch on weekdays, although some locations open early on weekends and Fridays. Shorter business hours mean lower expenses and fewer staff, but that’s not the only benefit. Avoiding lunch hours reduces walk-in crowds and convenience, allowing Texas Roadhouse to locate in less desirable areas and lowering real estate costs.
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And while Texas Roadhouse’s steaks themselves are often very affordable, the restaurant has plenty of upselling options to increase profit margins, and the staff is strongly encouraged to push them. Masu. Toppings like cheese, mushrooms, and onions can add a few dollars to your order, and servers keep track of how much they upsell. Cheap steaks also attract people to spend more on higher-margin items such as accompaniments, appetizers, and alcohol.
Finally, Texas Roadhouse rarely changes its menu. Instead of following trends, we sell the exact same products every year. Not only does this mean efficiency through consistency, but it also means that companies don’t have to spend money developing new recipes. The chain also does little advertising, relying instead on customer loyalty and prices that speak for themselves. Each of these strategies may make a small difference, but when you combine all three with beef trading, you end up with big savings for both your customers and your company.
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At Texas Roadhouse, customer satisfaction is high due to high quality food, affordable prices, and high employee retention rates.
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While many of Texas Roadhouse’s business practices are unique and have been streamlined to suit affordability, other aspects are just plain old common sense restaurant practices, similar to many struggling chains. Stores could learn from that. The company doesn’t skimp on quality, whether it’s food or service, and customers can tell the difference. Although not on the level of a high-end steakhouse, Texas Roadhouse’s steaks and food are good enough to impress even professional critics, especially for the portions and low prices. The company has also been successful in retaining long-tenured employees in recent years, with experienced employees doing better work, providing a higher level of service, and increasing the company’s sales. Instead of constant turnover due to low wages and poor working conditions, we have found that having happy and experienced staff actually makes everything better.
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Customers notice all of this, giving Texas Roadhouse the highest score in the U.S. Customer Satisfaction Index survey among full-service restaurants. That’s the kind of experience that drives repeat customers, and the chain’s success comes not just from expanding stores, but from existing stores continually increasing sales. Texas Roadhouse’s success has been impressive and they employ some interesting strategies to keep prices down, but at the end of the day, what business would you be without the basics: good food, motivated employees, and great service? also has no meaning.
