Choncholopolis

Ruth's Chris Steak House: Wide Open to a Hostile Bid

Before they went public all of their beef was USDA prime. After they went public they started using Choice beef as well, especially with the Filets which approximately 90 percent are Choice instead of Prime. Which is why Ruth's Chris says they 'feature' USDA prime. They also don't put the size of the cuts on the menu so you will get a petite filte which is three dollars less than the full size filet and is eight ounces as opposed to twelve with the full size. Really a three dollar mark up for fifty percent more beef gives an indication of their margins. Most significantly they are in the highest bracket for beef and the price of beef just continues to go up. Graising is increasingly expensive and the bull run in the commodities market coupled with the emergence of ethanol as a substitute/supplement to gasoline with has itself contributed greatly to the bull run of the commodities market all work to dry up the price of beef. Additionally emerging markets are increasing their buying power and the dollar has continued to devalue. These factors contribute to a world wide increase in demand for quality proteins i.e. beef. All of these factors point to increasingly difficult times ahead as Ruth's Chris attempts to sustain inflated margins, which will allow them to be as profitable as they have been, while still being competitive without pricing themselves out of most peoples range all together and decreasing the frequency of those who were otherwise consistent customers.