Betty Blowtorch

Tough Road Ahead for Texas Roadhouse

Like a lot of companies, TXRH needs to embrace inflation. It's here and it ain't going away so adapt. TXRH, PNRA and others should maintain margins by hiking prices as needed. TXRH can try to maintain traffic by offering some cheaper cuts or proteins at lower price points. If they can't pass through the higher cost of biscuits ("made from scratch!") or other items, then 86 them. Traffic is going to slow regardless and can't be controlled. Margins are controllable.

Restaurants that take price and give up traffic are just successfully adapting to the new world order. Unfortunately, most want to maintain traffic and are willing to take huge margin hits to do so. Lower margin/same traffic is the most common outcome. Higher margins, less traffic is a better option.

It's the Seventies all over again, get used to it.