We finally know why Texas Roadhouse is so cheap
Like many other restaurant chains, Texas Roadhouse plans to entice customers with its core offerings — in this case steaks — and boost revenue by selling higher-margin items like beverages (via Technology and Operations Management). Thus, most Texas Roadhouse restaurants have a full bar offering a wide range of bottled and draft beers, as well as name brand wines and liquors. This strategy seems to be working since alcohol represented 10.8% of the chain’s sales in the 2021 financial year (via Market watch).
One of the restaurant’s specialties is the Margarita. In fact, the chain offers 15 different versions of the cocktail. The cocktails come with an upsell option, affectionately called the “kicker,” which consists of tequila and triple sec (via Eat this, not that). Beverage manager at Quiote in Chicago, Jay Schroeder, said Restaurant that Margaritas are the perfect cocktails when it comes to high profit margins, “With the classic, you don’t envision using a lot of different expensive liquors, or multiple pieces of produce. At its core, it’s a recipe for a cost-effective cocktail…even when you use the best expression of these ingredients.” Additionally, Texas Roadhouse also serves the typical range of non-alcoholic beverages, which can generate a 90% profit margin.