Texas Roadhouse Is Increasing Menu Prices (Again)

Texas Roadhouse bread
Texas Roadhouse bread - Colinhui/Getty Images

Though we've already seen plenty of restaurant chains raising their prices over the last couple of years, it can still come as a surprise when a chain raises its prices multiple times, seemingly back-to-back. Texas Roadhouse, for instance, increased menu prices first by 2.2% back in April, and then by another 2.7% on October 26 (via Eat This, Not That).

One reason Texas Roadhouse raised its prices is the fact that business has increased in the wake of the pandemic, prompting the chain to extend its hours and appropriately compensate its employees. Meanwhile, beef prices are higher than ever — at about $8 per pound — due to lower supply.

With the costs of business running so high, Texas Roadhouse faced smaller profit margins –- 14.6%, as compared to the goal of 17-18%, per Nation's Restaurant News -– prior to offsetting those numbers with increased menu prices. Of course, even raising menu prices won't immediately solve the issue, but it could be a step in the right direction.

Read more: The Best Steakhouse In Every State

Could Takeout Be A Solution To Texas Roadhouse's Low Margins?

Texas Roadhouse takeout
Texas Roadhouse takeout - Melody Wydra Reyes/Facebook

Texas Roadhouse may not have any control over the rising price of food, the chain does have control over its business strategy. Currently, FSR Magazine reports that about 12% of the chain's sales come from takeout orders, so placing more emphasis on that avenue of business could help increase profit margins.

For example, restaurants that focus more on takeout and delivery than dine-in service can work out of smaller, lower-rent spaces while also employing fewer people. This, obviously, translates to lower costs for labor and operation, while still churning out orders in high volume.

On a similar note, Texas Roadhouse could implement additional technologies to help streamline business while also reducing the number of staff members. Options like mobile check-in, finding available tables, and self-serve kiosks could assist restaurants in managing dine-in crowds with fewer servers on the floor at a time. All we can say for sure is that Texas Roadhouse seems determined to keep its customers at the forefront.

Read the original article on Mashed.