That was a noticeable improvement. In Q1 and Q2, labor dollars per store week bumped 8.2 percent and 7.4 percent, respectively.
Essentially, the road ahead looks as follows for Texas Roadhouse: Prepare for mandated state wage increases, ongoing market pressure, and the growth in labor hours that, again, can be credited to continued traffic growth and higher AUVs.
Yet don’t budge on the core, quality- and service-driven operating practices that separate the brand from competitors when it comes to dine-in traffic in a convenience-fueled landscape. That means raising staffing levels at lagging units. But, now, it also means lowering them when that’s necessary, too.
“When I go into stores, I look at the faces of our guests who are interacting with our people, and I continue to see smiles going back and forth,” Taylor said. “So I think we're still keeping the staffing levels at the appropriate point to have those great guest to employee interactions.”
The hope is that those hours will start to align more with Texas Roadhouse’s traffic growth and perhaps even fall a little bit below. Growth in labor hours has outpaced traffic gains in recent quarters. In Q2, it was 2.8 percent versus 1.7 percent.
Robinson said labor improvements unfurled throughout Q3 as Texas Roadhouse engaged market partners and pinpointed areas to target. The key learning, though, was understanding just how many hours restaurants truly need to grow sales and guest counts to Texas Roadhouse’s standard. Not just passing down an arbitrary figure from corporate. “That’s really what we’ve been doing,” she said.
Taylor added that Texas Roadhouse brought “quite a few” managers on to gear up for its push toward $6 million AUVs. A lot of those employees are now out of training and in restaurants.