In early November, as Halls Chophouse 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 from $57. A rib-eye, to $85 from $82.
Beef prices had been climbing all year, and 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 Southeast. “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 midpriced 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.
With the nation’s cattle inventory at its lowest level since the 1950s, ground beef, chuck roasts and steaks have surged in price over the last two years. Restaurants that specialize in steak are feeling the same sticker shock as consumers in grocery stores, as the price of USDA choice boneless steak has soared 20 percent in the past year to an average of $14.13 a pound, according to September data from the Bureau of Labor Statistics. (The steak hit a record high of $14.32 in August.)
How much restaurants can raise menu prices depends largely on who their customers are. Many fine-dining steakhouses, which typically sell high grades of prime steak to high-income diners, say they are seeing little pushback as they price an eight-ounce filet mignon above $60.
But when the midpriced chain Outback Steakhouse raised prices over the last couple of years, consumers balked. Traffic nose-dived, it closed locations and the stock of its parent company, Bloomin’ Brands, plummeted nearly 47 percent in the past year.
“The question for Outback is, did they take too much price and that negatively impacted the guest experience?” said Brian Vaccaro, a restaurant analyst at the investment bank Raymond James.
A spokeswoman for Bloomin’ Brands said, “We’re focused on meeting guests where they are by offering high-quality steaks and a variety of price points that deliver strong value.”
Still, despite the surge in beef prices, Americans haven’t slowed their consumption of burgers and steak. Consumers will eat an average of 58.5 pounds of beef this year, a touch lower than last year’s 59.1 pounds, according to forecasts in August by the U.S. Department of Agriculture.
Some economists attribute the continued robust demand for beef to a strong growth in salaries in the United States. Average hourly earnings rose 3.8 percent in the past year to $36.67, according to the U.S. Bureau of Labor Statistics data for September.
“There are certain people who will never put steak on the table because their income situation doesn’t allow for it,” said Michael Swanson, the chief agricultural economist at Wells Fargo Agri-Food Institute. “But a whole number of other cohorts are doing fine and would prefer to continue to buy steak no matter where the price goes.”
Executives at Omaha Steaks, a meat and food delivery company, said preorders for this year’s holiday season were up 15 percent from last year. Nate Rempe, the chief executive of Omaha Steaks, said about 45 percent of the company’s yearly sales took place during the holiday season, with a box of filet mignons selling every 2.7 seconds in December. The company has not raised prices for its steaks and other meats this year because it stockpiled beef when prices dipped during the year and froze the meat for future sales.
“It will be 2027 before pricing comes down meaningfully,” Mr. Rempe said. “But I’m an opportunistic commodities buyer. We can build our inventory at lower costs.”
Trying to hedge costs by buying at select times is more difficult for restaurants, which typically rely on fresh cuts of meat. Moreover, Dr. Swanson said changes in feeding practices and other improvements by ranchers have led to a shift in the quality of the beef in the country, with most fitting into two categories: the highest, prime grade, which is typically sold in finer restaurants; and choice, which is frequently found in midpriced chains. Select, which is usually the least expensive and accounted for 30 percent of beef sold in 2010, made up about 14 percent of the market in 2024, according to the U.S.D.A.
Big chains can use their size to get better prices from meat producers or packers, but prices are still challenging their businesses.
Prices for beef and other ingredients surged 7.9 percent in the third quarter from the year earlier for Texas Roadhouse, a restaurant chain with ardent followers. But profit margins shrank as the company kept price increases relatively low to retain customers. The company’s stock has fallen 14 percent in the past year.
The company raised prices about 1.7 percent in the fourth quarter, executives said in a November earnings call, adding that consumers had not been scared off.
Business did appear to be booming on a recent Friday evening at a Texas Roadhouse in North Plainfield, N.J. The parking lot was full, and about 30 people stood in the entryway waiting for tables. Inside the boisterous, Western-themed restaurant, wait staff balanced trays of steaks, burgers and margaritas. There, an eight-ounce Texas filet mignon with soft rolls and honey cinnamon butter plus two sides totaled $28.99.
Texas Roadhouse did not respond to emails requesting comment.
Jess & Jim’s Steakhouse, a casual restaurant in Kansas City, Mo., is also being careful not to raise prices too much, said Debbie VanNoy, a manager at the restaurant who is also a member of the family that has owned it for 87 years.
“We’ve raised prices, but not by a lot,” Ms. VanNoy said, noting that the price of a popular 12-ounce prime rib-eye dinner that includes a salad and a side had gone up $5 about four weeks ago to $43.99. (An eight-ounce filet also costs $43.99.)
But some customers who had been reliable beef eaters, Ms. VanNoy said, had made changes. “Now, they’re sometimes getting the chicken or the pork chops,” she said. “They’re limiting their steak purchases a little bit.”
Still, on an early December weekday at the Halls Chophouse in Charleston, S.C., as Mr. Hall prepared for the dinner crowd, he said all five of his restaurants were fully booked through the holiday season.
“People are still buying the more expensive cuts, the bone-in filet, the tomahawk steak, the Kansas City strip steak,” he said. “The volume of those cuts has been holding steady.”
As for what happens next year, that is tougher to predict.
“I’m not so nervous about December,” Mr. Hall said. “But I’m extremely nervous about January and February.”
Julie Creswell is a business reporter covering the food industry for The Times, writing about all aspects of food, including farming, food inflation, supply-chain disruptions and climate change.
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