The U.S. casual dining industry has a new leader.
Texas Roadhouse, a 664-unit Texas steakhouse chain that has been growing rapidly for years, surpassed long-time leader Olive Garden to become the No. 1 steakhouse chain in system-wide sales.
That’s according to Technomic’s latest data on the 500 largest restaurant chains in the U.S.
Texas Roadhouse’s system-wide sales in the U.S. soared 14.7% to $5.5 billion last year, according to Technomic. The company also opened 26 new stores, a 4.1% increase.
The Louisville, Kentucky-based chain has been growing rapidly for years. It has benefited greatly from a surge in consumer demand for steaks after the pandemic. It has also further fueled its growth by investing in its people and operations while keeping prices below the rate of inflation. It has also stepped up its development of new stores.
Olive Garden, which has been at the top of the list since 2018, will see system-wide sales increase by just 0.8% to $5.2 billion in 2024. The company opened 15 new restaurants, bringing its total to 923, an increase of 1.7%.
The Italian chain, known for its large portions and all-you-can-eat breadsticks, has lost business with some lower-income consumers, who are most affected by inflation. To attract those customers, the company has revived promotions such as “all-you-can-eat pasta,” and said those customers seem to be feeling better in recent months.
Still, its performance was a sharp slowdown from 2023, when sales rose 8.8%.
That was in stark contrast to LongHorn Steakhouse, a sister brand owned by Olive Garden’s parent company Darden Restaurants. The 594-unit steakhouse chain surpassed Outback Steakhouse to become the sixth-largest casual dining brand with a 7.2% sales increase. LongHorn also opened 14 locations last year.
In other changes in the rankings of top brands in the casual dining sector, Chili’s surpassed Applebee’s to move into third place with a 15% sales increase. The bar-and-grill chain is in the midst of a strong comeback, thanks to a refreshed menu and value-focused marketing that’s resonating with consumers.
Meanwhile, Applebee’s sales fell nearly 6% and it closed 35 locations.
It’s been a tough year for large casual dining chains, but Texas Roadhouse, Chili’s and LongHorn stood out. Four of the 10 largest chains saw sales decline, and the top 10 saw an average sales increase of just 0.6%.
The segment has been struggling to win over price-conscious consumers, which has spawned a slew of value packages and promotions. But it’s also had to deal with consumers’ growing demand for convenience and fast-casual concepts. As consumers turned to certain casual dining brands last year, it created clear winners and losers. It also prompted underdog brands like Red Lobster, Red Robin and Outback Steakhouse to adjust leadership and begin turnaround efforts.
Related topics: