And no, it’s not because they’re low quality.
Texas Roadhouse's business model is predicated on getting lots of people through the doors and being served a meal. To do that, they keep their prices on customer favorites, like steak, quite low—in fact, the chain often sells steaks for below-going market value, cutting into potential profits but knowing it is securing more business in terms of volume, according to
. If people keep coming back for the cheap steaks, they also buy the sides and salads and beers and such. Plus, they're not eating at a competing chain.If you've ever been to Texas Roadhouse, the upsell starts immediately, you just aren't aware of it. A large case of hand-cut steaks beckons as the server grabs a hot, fresh-baked batch of their signature bread with honey-cinnamon butter.
. By locking in contracts with beef suppliers, the chain becomes inoculated against rising prices in the meat marketplace and can control its costs.
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