Steakhouse owners are in the process of discovering just how much Americans really want their beef. With cattle herds at their smallest since the 1950s and wholesale costs jumping, the New York Times reports that restaurants specializing in steaks are now in a tenuous position: hiking prices enough to cover costs without scaring off diners. The situation is especially pronounced this month, when holiday corporate parties and splurge dinners can make or break the year.
"Code red" is the term used by Tommy Hall of the Halls Chophouse chain, which just raised the price of an 8-ounce filet mignon from $57 to $61. The squeeze he feels is industrywide. Government data show average retail prices for USDA choice boneless steak are up roughly 20% over a year and are near record highs of $14.13 a pound. Upscale steakhouses say their clientele is largely absorbing the hikes, but midmarket chains have less room to maneuver: After Outback Steakhouse raised prices, guest counts slumped, locations closed, and parent company Bloomin' Brands saw its stock drop nearly 50%. Texas Roadhouse kept increases modest despite ingredient costs rising almost 8%, a move that protected traffic but trimmed margins and helped push its stock down 14%.
Consumers, however, haven't abandoned beef. The Department of Agriculture expects Americans to eat almost as much beef this year as last—about 58.5 pounds per person. A post at Food & Wine doesn't see prices coming down anytime soon. Its story offers suggestions for cost-conscious meat eaters, including little-known cuts such as the bavette. "Located on the bottom of the sirloin, this cut is like a flank but has a bit more marbling and is thicker, making it ideal to sear like a steak," a chef explains.
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