Why Texas Roadhouse Is Beating The Competition As The Fastest-Growing Steakhouse

News on chain restaurants may be centered around the struggles of big longtime favorites like Red Lobster or the imploding TGI Fridays, but Texas Roadhouse has bucked the trends. It's not just the fastest growing steakhouse in America — a 2023 report for Brand Finance said it's the fastest growing restaurant brand in the world. According to Food & Wine, the 2024 Technomic Top 500 Chain Restaurant Report found that sales for Texas Roadhouse grew more than 15% in both 2022 and 2023, even as many casual-dining competitors saw declines around the country. With over 700 locations as of this writing and plans to reach 900 in the coming years, the steakhouse has become one of the 20 biggest food chains in the U.S., period. Pretty amazing for a business selling a higher-end item like steak at a time when many people are cutting back on spending. And while there are always plenty of reasons for a company's success, the secret for Texas Roadhouse appears to be a mix of unmatched value and high customer satisfaction.

Steakhouses are an American favorite, and while rivals like LongHorn and Outback are also doing well, neither of them can compete with Texas Roadhouse's prices. Despite using quality USDA Choice beef cuts, the chain manages to keep its meals more affordable through a combination of cagey business practices. Texas Roadhouse bucks most trends by signing long-term fixed-price deals with beef suppliers, which are more expensive up-front but have insulated it against volatile, rapidly rising costs. But good supplier deals are just part of a comprehensive strategy to keep fees low.

Unlike many chains, Texas Roadhouse is usually not open for lunch on weekdays, although some locations open earlier on weekends and Fridays. Shorter operating hours mean lower expenses and fewer staff, but that isn't the only benefit. Avoiding lunch makes walk-in traffic and convenience less of a factor, so Texas Roadhouse can also put its stores in less desirable areas, which means cheaper real estate costs.

And while Texas Roadhouse's steaks themselves are often very affordable, the restaurant has lots of upselling options that drive up profit margins, and staff are heavily encouraged to push them. Toppings like cheese, mushrooms, and onions can add several dollars to an order, and servers are tracked on how much they upsell. Cheap steak also draws people in to spend more on higher-margin items like sides, appetizers, and alcohol.

Finally, Texas Roadhouse almost never changes its menu. Instead of chasing trends, it sells the exact same items year after year. Beyond the efficiency that comes with consistency, this also means the business doesn't need to spend money developing new recipes. The chain also does almost no advertising, instead relying on customer loyalty and prices that speak for themselves. Each one of these strategies might make a small difference, but combine all three with its beef deals and the end result is big savings for customers and the company alike.

While many of Texas Roadhouse' business practices are unique and streamlined for budget pricing, there are other aspects that are just plain old common sense restaurant practices, which a lot of struggling chains could learn from. The company doesn't skip on quality, either for its food or its service, and customers can tell the difference. While they aren't at the level of a fancy steakhouse, Texas Roadhouse's steaks and food taste good enough to impress even professional reviewers, especially with how big the portions are and how low the price is. It has also managed to hold on to longer tenured employees in recent years, and experienced employees do their jobs better, both providing a higher level of service and selling better for the company. It turns out that having happy, experienced staff — as opposed to constant turnover from low pay and bad working conditions — actually makes everything work better.

Customers notice all this, and have rewarded Texas Roadhouse with the top scores in surveys from the American Customer Satisfaction Index among full service restaurants. That's the kind of experience that drives return customers, and the chain's success hasn't just come from expanding stores, but from existing stores continually increasing sales. While Texas Roadhouse's success is impressive, and it has employed some interesting strategies to keep prices down, in the end none of it matters without the basics of good food, motivated employees, and good service.