Americans love cheap meat.
But they have found it increasingly difficult to find as restaurant chains, especially fast-food ones, have pushed through steep price increases.
Texas Roadhouse and LongHorn Steakhouse have bucked the trend in menu costs: They both offer steak, potatoes and vegetables for $20 to $25.
And as a result, they are seeing a business boom.
Texas Roadhouse, with 655 restaurants in the U.S., reported an 8.4 percent sales increase in the first three months of 2024 over last year. In Longhorn, they are up 4 percent.
Typically, Americans take to social media to complain about rising prices, but not with these two chains, which are rivals but appear to be pressuring each other to offer better value.
Texas Roadhouse fans have taken to Reddit to praise the chain.
On Reddit, a thread titled ‘Texas Roadhouse never disappoints’ has 5,000 upvotes.
Another shows a photo of a steak dinner with the caption Incredible value for $22 at Texas Roadhouse – users lined up to agree.
“It’s a beauty,” one said of the steak in the photo.
Longhorn, with nearly 600 locations, is owned by Darden. It outperformed the other chains in Darden’s portfolio, including Olive Garden, which said this week it will raise prices.
McDonald’s has started touting its value credentials – and launched a $5 meal deal – after admitting in March that customers were staying away due to rising prices.
Both have a track record of performing well during economic uncertainty.
Steakhouse sales increasing during tough times may seem counterintuitive. But rival chains have achieved what every restaurant aspires to: make customers feel they are getting good value for money.
Compared to local establishments or high-end chains like STK Steakhouse, both chains are “very affordable,” said Jim Salera, a research analyst at Stephens. cnn.
The average check per person in Longhorn is $26 and for Texas it is $22.
Steak is still considered a luxury, so getting a decent-sized cut along with potatoes and vegetables for that price is good value, experts say.
A busy Texas Roadhouse restaurant
Texas Roadhouse (left) and Longhorn Steakhouse, two other great steaks for under $25
“For the mainstream consumer, it really represents an affordable luxury,” Salera said.
As a recent Bank of America note analyzing LongHorn’s results put it: “Consumers recognize the core value of the dish that steak offers.”
Most restaurants have imposed large price increases. McDonald’s, for example, has increased prices by an average of 40 percent since 2019, it said recently.
Things are different in LongHorn and Texas, BTIG restaurant analyst Peter Saleh told CNN.
He said they have been trying to raise prices below inflation “for a while now.”
