Texas Roadhouse Makes its Foray Into the Branded Merchandise Segment
Texas Roadhouse is the latest to join the growing number of restaurants that have created and sold merchandise as a way to engage with customers. The restaurant chain will now sell candles.
Texas Roadhouse’s new merchandise launch
If you have been a fan of the Honey Cinnamon butter that you get with the bread rolls at Texas Roadhouse, you now have a chance to spread the aroma in your house. Texas Roadhouse has launched a limited edition 'Honey Cinnamon Butter Candles' just in time for the holidays. The candles, launched last month, can be purchased at the Texas Roadhouse merchandise link at www.texasroadhouse.com. Each 13-ounce candle is priced at $12 and can last for approximately 50 hours. The limited-edition Honey Cinnamon Butter Candles also mark Texas Roadhouse's entry into the branded merchandise market.
Texas Roadhouse’s decision to sell merchandise
Texas Roadhouse is the latest to join the growing number of restaurants that have stepped into the Restaurant Trends of creating and selling branded merchandise as a way to engage with customers. Restaurant chains like PF Chang's, Dunkin', and Taco Bell have sold limited-edition apparel online in the past.
The decision to enter the branded merchandise market was taken as 'the customers and fans have been requesting for Texas Roadhouse merchandise for years', according to Texas Roadhouse President and CEO, Jerry Morgan. He added that the Honey Cinnamon Butter Candles were the perfect merchandise to launch their retail efforts, as customers could enjoy a bit of Texas Roadhouse in their own homes.
If you think Texas Roadhouse has only the Honey Cinnamon Butter Candles on its merchandise page, think again. The page also features items like Texas Roadhouse peanut brittle, baby onesies, and other branded items. You can also shop for mail-order restaurant-quality Texas Roadhouse Butcher Shop USDA choice steaks from the page.
Texas Roadhouse plans for 2022
Apart from entering the branded merchandise market, the restaurant chain also plans to open 25 Texas Roadhouse and Bubba's 33 restaurants, along with five franchise restaurants. The restaurant expansion continues from 2021, when the company opened 23 Texas Roadhouse outlets, five Bubba's 33, and a solitary Jaggers restaurant. The company also acquired seven franchise restaurants in South Carolina and Georgia for approximately $27 million in 2021.
The company's 2022 plans are helped by a strong cash flow, which has also helped Texas Roadhouse to reinstate its dividend and pay back a portion of its debt.
The company also has plans for overseas expansion and has signed franchise agreements in nine countries in China, Taiwan, the Philippines, Mexico, the Middle East, as well as South Korea, Puerto Rico, and Brazil. As of December 2021, the company had 31 restaurants in ten foreign countries.
CEO Morgan said that in 2023, the company wants to lower the impact of permitting and building approval delays, and it is optimistic about returning to a higher level of openings. "The newly opened restaurants have a strong sales record, and we are confident that we will have a long runway for new Texas Roadhouse locations," added the CEO.
Market sentiments about Texas Roadhouse
Texas Roadhouse released its first-quarter fiscal 2022 results in May, and the company's performance was better than analysts' estimates. The company reported non-GAAP diluted earnings-per-share (EPS) of $1.08, $0.17 more than analysts' estimates of $0.91. Revenue saw a year-over-year increase of 23.4% to $987.6 million compared to consensus analyst estimates of $973.62 million. While restaurant margins dipped to 16.4% due to 17% commodity inflation, CEO Jerry Morgan opined that though the higher costs had an impact on the bottom line, the company will remain focused on providing legendary food and service. He said that the healthy cash flow is the main reason they are able to focus on new store development to grow their brand. He added that they repurchased over one million shares of the common stock, the most significant buyback since before the pandemic.
CEO Morgan pointed out that the strong top line was the reason for earnings reaching 20% growth for the quarter. "The increase in menu prices by 3.2% had no negative reaction and was well absorbed by customers. Even though customers are feeling the pressures of inflation, Texas Roadhouse will maintain its market position," said the CEO.
Know more about Texas Roadhouse
Texas Roadhouse Inc. has three brands- Texas Roadhouse, Bubba's 33, and Jaggers, and is headquartered in Louisville, Kentucky. The company has over 630 locations in the United States and over 29 locations in 10 other countries.
Texas Roadhouse is a casual dining, full-service restaurant chain known for its variety of seasoned and aged hand-cut steaks. The company also serves ribs, chicken, seafood, pork, and vegetable plates, as well as hamburgers, sandwiches, and salads. The restaurant chain is famous for its unlimited roasted in-shell peanuts and freshly baked rolls.
Bubba's 33 is a family-friendly sports restaurant that serves meals like burgers, pizza, and wings made from scratch, as well as beer and cocktails. The first Bubba's 33 restaurant outlet saw its opening in Fayetteville, North Carolina in 2013.
Jaggers is a fast-casual restaurant chain that serves burgers, hand-breaded chicken tenders, and chicken sandwiches with scratch-made sauces. The chain, which was started in Noblesville, Indiana in 2014, has drive-thru, carry-out, and dine-in options.
Why fast food chains offer merchandise
With Texas Roadhouse now entering the branded merchandise market with their signature Honey Cinnamon Butter scented candles, there have been a growing number of Restaurant Owners and fast food chains that launch merchandise in an effort to connect with their customers.
Take, for example, Chipotle's "lemonade-scented water cup candle" a sly dig at customers who overuse the free water cup policy, or KFC's herbs-and-spices-scented fire log, which has now become a holiday staple.
Nowadays, when there are hundreds of brands clamoring for your attention and cash, it is not enough to be an awesome brand. Companies need to go beyond traditional marketing and advertising methods to make the brand stand out among competitors and connect with and create brand awareness among customers.
Many restaurants and fast food chains are currently leading these efforts with branded merchandise. This raises questions about the importance of branded merchandise. Branded merchandise creates opportunities for a brand's growth. Many millennials and Gen Z tend to opt for brands that they can connect with. Creating merchandise like a t-shirt or a candle that resonates with the customers helps build brand loyalty and also makes your customers your brand ambassadors.
Out-of-the-box merchandise by fast food chains
After looking at the importance of branded merchandise in fostering brand loyalty, let us look at some out-of-the-box New Product launches that left many scratching their heads.
- KFC's fried chicken sunscreen- If you like the smell of fried chicken enough to put it on yourself, KFC granted your wish in 2016 with their extra crispy fried chicken factor 30 sunscreen. The 3,000 free bottles of the limited-edition merchandise were made available on the official website, and the product was stocked out almost immediately.
- Pizza Hut's box DJ Decks- If you couldn't afford a deck, then you should have snapped up the working cardboard DJ deck for the price of a Pizza Hut pizza. The pizza chain came out with limited-edition merchandise in 2016 where you could plug in the deck's battery and connect it to your phone via Bluetooth and use any DJ apps you have.
- Burger King's flame-grilled perfume- Would you spray yourself with a perfume that smells like sizzling meat mixed with condiments? Burger King offered the Flame-Grilled perfume priced at $41 exclusively in Japan for a limited period in 2015. You also got a free whopper when you bought it.
- Dunkin' Lip Balms come in Munchkin flavor and are also shaped like their trademark coffee cups.
- Starbucks' color-changing tumblers completely sold out in a week after their launch in 2019. But worry not; Starbucks releases a new tumbler every season.
- The KFC Crocs, which look like fried chicken. The merchandise is sold out, but you can add them to your bucket list.
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