As the price of beef soars, US restaurants are in 'code red'

Mid-priced steakhouses and fine-dining establishments in the US are trying to figure out how to cover their rising costs without scaring away customers, writes Julie Creswell from New York

- Julie Creswell

Patrons dine at a steakhouse in New York. Many restaurants like this have to balance raising prices enough to cover expenses but not so much that consumers stay away.

n early November, as Halls Chophouse in Charleston, South Carolina, was heading into the critical holiday season, its president, Tommy Hall, made a tough call: Prices at his steakhouse chain would go up.

The price of the popular eight-ounce filet mignon rose to $61 (about 1,950 baht) from $57. A rib-eye, to $85 from $82.

Beef prices had been climbing all year, and Mr Halls found itself in a “code red,” said Mr Hall, who heads up Halls Chophouse, which is family-owned and has five steakhouses in the southeastern US. “We had to raise prices, or we weren't going to be able to cover costs,” he said. “Every time we do a price increase, I have butterflies in my stomach wondering how customers will take it.”

For steakhouses like Halls, December is the biggest month of the year. It's when companies rent out private back rooms for lavish parties; corporate expense accounts cover two-martini lunches; and families treat themselves to a night of steaks, bottles of cabernet sauvignon and sides of creamed spinach, truffle mac and cheese and au gratin potatoes.

But this holiday season, many steakhouses — from fine-dining restaurants to mid-priced chains like Texas Roadhouse and LongHorn Steakhouse are walking a tightrope. They have to balance raising menu prices enough to cover at least some of their expenses, but not so much that consumers stop walking through their doors.