Market Overview

Here's Why Steakhouses Are Outperforming Full-Service Restaurants

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Restaurants suffered through a rough 2016 with no relief in sight for 2017. There are a few exception to this, but none more notable than steakhouses.

Darren Tristano, president of the food consulting firm Technomic, told CNBC that steakhouses aren't only outperforming other full-service chains but are more insulated against headwinds including higher gas prices and unemployment.

Steakhouses also attract the more affluent consumers with a sizzling steak that is considered to be a premium meal. BTIG restaurant analyst Peter Salah told CNBC that the price of beef along with other food products have been dropping, yet consumers are still willing to pay top dollar for a top quality steak.

On the other hand, high prices for steaks still attracts middle class clients who reserve a steak dinner for special occasions.

"Even in somewhat uncertain economic environments, we've found guests will seek out great experiences for occasion-based dining like birthdays, anniversaries or any kind of celebratory event," Larry Johnson, CEO of Fogo de Chao, told CNBC.

Finally, what goes perfect with a dry aged premium steak? A great drink, be it wine or other. In fact, some of the most successful steakhouses these days are allocating more space towards the bar area than the dining room.

Tristano's firm estimates that up to 30 percent of sales at steakhouses come from beer, wine and cocktails.

Posted-In: CNBC Darren Tristano Peter Salah steak SteakhousesRestaurants Media General

 

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