When beef prices are high, more customers will order steak at restaurants, says the CFO of a major U.S. restaurant chain.

• When beef prices are high, more customers order steak at restaurants, said the CFO of Darden Restaurants.
• This is because customers are worried about the risks of grilling expensive steaks at home.
• In the United States, beefsteak prices have increased by 8.1% over the past year, far outpacing the overall food price increase (1%).

According to Darden Restaurants’ CFO, customers are worried about cooking expensive steaks at home because of the risk of failure, so they choose to eat them at restaurants instead.

“Steak sells a little better when beef prices are high because customers don’t want to take the risk of cooking something expensive themselves,” CFO Raj Vennam said on March 21. , said in the company’s third quarter earnings report.

Darden Restaurants owns multiple chain restaurants, including Olive Garden and LongHorn Steakhouse, and plans to open Ruth’s Chris Steak House in 2023. ” has been acquired. Venum revealed in September 2023 that beef accounts for 22% of the company’s food costs.

In 2023, customers spent an average of $25.50 per meal at Longhorn Steakhouse. However, the amount varies greatly depending on the store. At a restaurant in California, the cheapest steak (a 6-ounce cut of renegade sirloin) with salad and sides costs $18, while the same menu at a restaurant in Mississippi costs $14.

At Darden’s upscale seafood restaurant and steakhouse, Eddie V’s, customers spend an average of $114.50 per meal, and the cheapest steak (a 10-ounce center-cut filet mignon) comes without sides. It’s $58.

According to the Consumer Price Index released by the U.S. Bureau of Labor Statistics, the price of uncooked beefsteaks sold at grocery stores rose 8.1% in the year to February, compared to a 1% increase in overall food prices. greatly exceeded.

The only other grocery items that increased more than beefsteak were uncooked roast beef, baby food, powdered milk, and frozen still juices and drinks, which are a small percentage of grocery spending. Very little.

Beef and veal prices rose 14.6% in the year to February 2023, according to the Bureau of Labor Statistics’ Producer Price Index.

Data from the Bureau of Labor Statistics shows that the cost of eating out has increased far more than grocery prices over the past year. In particular, there are complaints that fast food is no longer a good value.