The Reason Texas Roadhouse Steaks Are So Affordable

Texas Roadhouse is one of the best destinations for families looking to get a steak dinner at a low price. What sets Texas Roadhouse apart is its incredibly high food quality. They pride themselves on making all of their food from scratch and made to order. Fans rave over their fresh yeast dinner rolls, baked fresh every five minutes, topped with the iconic Texas Roadhouse cinnamon butter. With a majority of their side dishes being priced at around $3.49 to $3.99, we at Food Republic decided to rank all the sides at Texas Roadhouse from worst to best.

We all know Texas Roadhouse guarantees fresh meat by employing in-house butchers to slice the meat in coolers set to 34 degrees Fahrenheit. But the true mystery was how Texas Roadhouse could serve fresh, never-frozen steak at such a great price. Turns out the way they keep their rates so low is by signing longer contracts with suppliers than other steakhouses and by using menu pricing strategies.

Beef is a highly volatile product in the market. Its prices rise and fall so rapidly depending on unpredictable circumstances like the weather and a growing reliance on imports. Because of this, cattle farmers seem to have more risk than farmers who grow different agricultural products. The price fluctuation in beef has steakhouses determining it's more advantageous to sign contracts that are six to 12 months long so they have the leverage of always paying market rate for the good.

In contrast, Texas Roadhouse signs contracts that are 24 months long. The longer commitment may have the steakhouse chain paying a little above market rate at some points, but it also protects Texas Roadhouse from the insane price increases that have been happening recently.

Although the restaurant is already considered generally affordable, there are many hacks one can do at Texas Roadhouse that will save you some more money. But you might be surprised to find out that these so-called "hacks" are meant to be used intentionally by the restaurant chain?

Texas Roadhouse engages in a practice called "barbell pricing." Barbell pricing is the practice of having both very cheap and expensive items on the menu. Restaurants do this to cast a wider net for diners. People who are on a tight budget can stick to the cheaper items, and people with a little more wiggle room will happily splurge on premium products. By having accessible pricing, Texas Roadhouse is ensuring it can reach a larger audience. And apparently, this method is working because a recent study by Harvard showed that Texas Roadhouse has more sales per square foot than its competitors.

Another way Texas Roadhouse keeps its costs low is by pricing its menus regionally. In more affluent markets, the steakhouse charges slightly higher than it does in others. While this is not a rare practice, it's not that common among all of Texas Roadhouse's competitors. So, this means anyone can chow down on a steak at a price point that won't break the bank, depending on where they are.