Texas Roadhouse grapples with rising food prices

Staff Writer
Texas Roadhouse grapples with rising food prices

High commodity costs will make sustaining success in 2012 difficult, Texas Roadhouse Inc. officials said after reporting positive third-quarter results.

Officials of the casual-dining chain said same-store sales, net income and earnings per share all rose in the quarter ended Sept. 27.

Food costs rose approximately 4.5 percent during the period, said chief financial officer Price Cooper. He also projected that they would rise from 7 percent to 9 percent in 2012.

“I would expect to feel more pressure on food costs next year, obviously, than we had this year,” Cooper said. “Just how much pressure that is all comes down to where we land on the pricing front.”

Texas Roadhouse plans to raise menu prices at the beginning of 2012, president Scott Colosi said, but added that the company still is determining how much to raise prices and for which menu items. Texas Roadhouse has been testing a 2-percent price increase since August, and may raise prices in some states additionally next year. No pushback from customer traffic or menu mix has arisen during the test, he said.

“We’re going to take our time after early January and see what’s going on with the economy and see what our competition is doing,” Colosi said. “A lot of our competitors are staying very aggressive in the deals they’re selling on TV, so we’re going to be very careful in the actions that we take.”