Texas Roadhouse’s Q1 same-store sales result of 18.5 percent comprised of 13 percent traffic and 5.5 percent average check. The company took about 5 percent pricing from 2019 to 2021, and it’s varied a bit market-to-market based on wage rates.
Although Taylor famously bucked third-party delivery over the years, the brand hasn’t shied from off-premises during this past year-plus. Just similar to Darden, Texas Roadhouse diverted attention to carryout and curbside over aggregator partnerships—experiences it can control closer and believes mirrors the in-store experience better.
Texas Roadhouse has maintained elevated levels of to-go sales regardless of the restaurant’s dining room capacity in recent weeks, Robinson said. Systemwide, to-go pushed more than $23,000 per week in Q1, or 18.7 percent of total sales.
Naturally, this is a lead reason why Texas Roadhouse accelerated on a two-year stack, despite capacity realties. If you go back to the week ending March 10, 2020, units averaged just $8,741 in weekly to-go business.
What’s happening today is the percentage of overall sales is coming down, but the per-week figure is sticking in that $24,000–$25,000 range. And if you look at units with 70–75 percent capacity, the numbers aren’t much different from those at 50 percent.
“So they're holding on to it. They're finding ways to do it,” Robinson said.
Additionally, Texas Roadhouse’s digital versus call-in business is shifting. Last quarter, it was basically split down the middle. Now, digital has inched closer to 55 percent.
The brand rolled an app upgrade, which makes it easier to order and pay for to-go, get on a waitlist, and use offers and gift cards for pickup,
Texas Roadhouse also moved the needle with logistical changes. It implemented pickup windows in some stores and tested “a couple” of drive-up windows (not drive-thru) where customers can text, stay in their car, and grab food from the hand-off point. “We're very happy with the pickup windows and we're excited to see what this drive-up window does for us,” Morgan said. “If it really makes it convenient for the guest and we can really get into that game then maybe we go back and look at some stores that we might be able to retro in and see if that works.”
It’s not just to-go lifting business. Texas Roadhouse has witnessed an increase in weekday demand across all hours. There’s been a benefit with shoulder periods. There are 200 or so restaurants opening earlier than before—3 versus 4 p.m. Guests are showing up earlier, perhaps to avoid crowds.
“You're seeing guests trading up to higher priced steaks and items entrees on the menu, bigger steaks,” Robinson added. “You see that alcohol mix coming back into play as the dining rooms reopen, all those things really playing into what's driving a lot of that sales momentum that we saw in March and April.”
Another element Texas Roadhouse finds intriguing, Morgan said, is how to pay at the table. “And if we can get that deal done, then I think that really does enhance the speed of the experience,” he said.
“From that speed side, I don't know that we'll ever get away from our philosophy of legendary service being anything more than tables,” Morgan said. “And I don't know that we will have a kiosk or ziosk or whatever to replace a smiling face engaged in your level of service. But … we need to work on our pay-at-the-table plan and get more people to utilize that and see what technology will help us in that particular part of the experience.”
One of the big learnings over the past year, expressed by Robinson, sounds like Taylor-speak to a tee. She said the company’s upside today, as is the case throughout full service, is the mix of dining-room sales jolted by pent-up demand, coupled with elevated to-go. “The one thing that we continue to take away, though, is not to make changes that put legendary food, legendary service at risk,” Robinson said. “And it's really easy to want to do that to cut something to get that profitability. But we look at it as that long-term investment, as we've talked about it a lot over the years. We're going to stay true to that.”
Morgan said the “entrepreneurial spirit in this company is strong.” Texas Roadhouse runs on an operating model similar to the one Outback got started on. Operators put up $25,000 (the first forked up $30,000 because Taylor was low on startup cash) and get 10 percent of the store’s profits.
“We learned that a lot from Kent,” Morgan said. “He gave us the freedom to be owners and operators and partners. He listened, he asked, we collaborate, we talk to each other. We help each other to find solutions.”
“We have a heck of a family here at the Roadhouse,” he added later. “And we're very excited to continue to show, respect, and love to a man that gave us so much and gave so much to the world and to the industry.”