Texas Roadhouse, the chain with the affordable food and the fan-favorite rolls with cinnamon butter, continues its runaway success. Industry publication Nation’s Restaurant News reports that the restaurant’s third-quarter revenues rose by 12.9% over the previous year, fueled by a 7.8% increase in average unit volumes. Even though America has a well-established steakhouse obsession, that’s still quite a feat.
Amidst all the good news for Texas Roadhouse, there’s one segment of its business that’s doing unexpectedly well: offsite sales. And that’s what the brand is hoping to lean hard on going forward.
Texas Roadhouse is going all-in on to-go orders
Texas Roadhouse doesn’t offer delivery services, but for those who either must or just prefer to eat at home, there’s always the option to pick up one’s order for takeaway. For the past two quarters, to-go orders have been an increasing source of revenue for the business, clocking in at a 12.3% of total weekly sales, said Michael Bailen, head of investor relations for Texas Roadhouse, during a recent earnings call.
This is an attractive growth opportunity for the brand, because the margins on to-go orders are much higher than dine-in. No servers are required to hand off these orders, so there’s less labor cost on the restaurant’s end. Add to this the fact that Texas Roadhouse has experienced 11 years in a row of continued traffic growth, and it might have unlocked the recipe for continued success.
Though the company isn’t getting into specifics just yet, it plans on investing more in its existing buildings to accommodate the promising to-go business. Texas Roadhouse chief executive officer, Jerry Morgan, said on the call, “That ease of pickup has always been a factor as we continue to get better at it.”
The potential downside Texas Roadhouse takeout orders
Microwaving a few rolls to perk them back up once you get home is one thing, but I have a feeling that not all dishes from Texas Roadhouse will fare that well in transit to their destination. The chain offers a lot of fried food, for example, which already has a clock ticking over it even when it’s served on-site at a restaurant. Any attempt to reheat it might turn things soggy.
Then there’s the matter of Texas Roadhouse’s flagship product: the steak. I’ve never ordered steak as a to-go item, mostly because I’ve always been concerned about how it would taste by the time I brought it home. I’m a medium-rare sort of guy, and since a steak has a lot of surface area compared to its volume, it risks being steamed in its takeout container or simply growing cold by the time I sit down to eat it.
Of course, it’s entirely possible someone lives within a five-minute drive of a Texas Roadhouse, but that’s unlikely to be true for the vast majority of customers. If you’ve had good experience with to-go steak, let me know, because I remain a bit of a skeptic.
Still, Texas Roadhouse seems optimistic about what it can offer in the future, and the company wants to remain a value concept over a higher-end one. So if you’re willing to take the risk of taking your steak to go, at least you can rest assured that you won’t have paid an excessive amount for it.