No Wonder This Is the Most Popular Steakhouse Restaurant

There's nothing like a good steak dinner. Indeed, a steak and potatoes meal is the epitome of solid fare, and even with the price of beef hitting record highs, steakhouses remain a popular destination when going out to eat.

Mmmmm. Steak. Photo: Wikimedia Commons.

According to the market researchers at Technomic, the top 10 steakhouses in the U.S. generated over $8 billion in sales in 2013, up 7% on average, which helped fuel a 6% build out in their restaurant footprint. Where the top full-service chains posted just a 2.4% increase in U.S. sales last year, the steakhouse segment surged some 6.2%.

Of course, not everyone fared equally well, and some did much better than others. For example,  Darden Restaurants (NYSE: DRI  ) LongHorn Steakhouse enjoyed sales gains of nearly 13% last year followed by Texas Roadhouse (NASDAQ: TXRH  ) with 11%, but Morton's Steakhouse saw its sales fall 2.8%.

Going hungry
Restaurants, generally, still face a divided future as NPD Group found there was little growth in consumer visits to U.S. restaurants during the early part of the year and unit growth barely budged higher, but that mostly came from fast-food joints pushing their store counts higher. Full-service restaurant units dropped 1% year over year. Worse, traffic at casual dining and midscale restaurants, both of which are in the full service category, fell 3% and 4%, respectively.

There's no traffic cop needed at most restaurants these days. Data: NPD Group.

So taking the performance of the steakhouses in perspective, it's easy to see that despite everything, they're still doing quite well for themselves.

That's why the folks at Market Force Information undertook to survey the opinions of 6,100 consumers in the U.S. and Canada on their favorite full-service steakhouse. They wanted to separate the best from the rest, weighting them on seven criteria: food quality, atmosphere, cleanliness, fast and friendly service, value, and kid-friendliness.

So which chain did consumers lasso as being the best?

A lot of red meat here
Not surprisingly, the top-ranking steakhouse chain scored well when it came to food quality, something you'd expect diners to think as most important when choosing a place to eat out. Yet it also did well in atmosphere  and cleanliness, not unimportant considerations by any stretch and enough of a difference to put it well beyond the reach of its rivals, even though some ranked higher when it came to service and accommodating kids.

Interestingly, the top steakhouse did poorly when it came to getting your money's worth from a meal, something you'd think would hold top mindshare in this challenging economy, but apparently the food is so good that it far outweighs the higher price you're paying.

So knowing those were the determining factors for which restaurants made the cut, what's your best guess for the top full-service steakhouse?

Throw some steaks on the barbie
If you're pick was Outback Steakhouse, don't feel bad. Ever since the first Australian-themed restaurant opened in the late 1980's when Crocodile Dundee was in the theaters and the Land Down Under was celebrating its bicentennial, it has proved to be a popular place to go. But the Bloomin' Brands (NASDAQ: BLMN  ) chain only scored in the middle of the pack overall, coming in fifth out of the seven chains rated, and wasn't a standout in any one particular category. That was the case also for Lone Star Steakhouse & Saloon, which came it at the bottom of the list, far and away the worst of the bunch, and Logan's Roadhouse, which fell in between the two, though it did place second for value.

The second, third, and fourth place finalists were Texas Roadhouse, The Keg, and LongHorn Steakhouse, respectively. It was Texas Roadhouse whose service was ranked tops and it was rated the best in value, while The Keg came in second only to the No. 1 chain in terms of food quality, ambience, and cleanliness.

So who is it?

Grade A beef
If you guessed The Capital Grille as the top full-service steakhouse restaurant, go ahead and toss your stetson up in the air.

Data: Market Force Information.

The Darden Restaurants high-end chain is one of a group of small niche concepts the restaurant classifies as the future of its high-growth plans, one that includes Eddie V's, Seasons 52, Bahama Breeze, and Yard House.

It acquired The Capital Grille in 2007 from RARE Hospitality International, from which it also obtained LongHorn, and has nearly doubled the number of restaurants from 29 to 54 in that time period. 

A high-end steakhouse is a capital idea when your customers are the affluent. 

As part of Darden's specialty restaurants, The Capital Grille has helped the group grow revenues to $342 million last quarter, up 15.9% from the year ago period, primarily as a result of higher same store sales, but also from new restaurant openings. The Capital Grille's comps were 3.4% higher for the fiscal year and were up 4% in Darden's fiscal fourth quarter, making it the 17th consecutive quarter of positive same restaurant sales.

Steak lovers keep coming back for more at The Capital Grille steakhouse. Data: Darden Restaurants SEC filings.

The Capital Grille's average check per person was approximately $69 to $76, perhaps explaining why they weren't perceived as a particular value and ranking low on the Market Force Information survey in that category, particularly when Texas Roadhouse reported its average check was $15.80 per guest.

Money's no object
Obviously a few chains have been left off the list, such as Morton's and Ruth's Chris Steak House, which would have been interesting to see how they stacked up to The Capital Grille. The market analysts at Technomic believe high-end steakhouses have performed particularly well because they cater to an affluent clientele, who have done better in this economy even as those beneath them continue to suffer from a malaise.

A little surf and turf can cure any market malaise. Photo: Ruth's Chris Steakhouse.

On a comparable sales basis at least, Ruth's Hospitality Group (NASDAQ: RUTH  ) reports its steakhouse is doing well with comps running 2.8% higher last quarter and coming in 5.3% higher in 2013. As its average check is $73 per person, Ruth's is comparably priced to The Capital Grille indicating well-to-do customers in any event are willing to pay up for the experience.

Fine dining restaurants, generally, have done well since the recession, and steakhouses, particularly these pricey ones, even more so. They just might be a segment of the restaurant industry investors should consider sinking their teeth into.

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Read/Post Comments (27) | Recommend This Article (59)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 31, 2014, at 11:22 AM, Goldenboys wrote:

    Long time fan of Capital Grill (Boston). We don't go there for a cheap meal...it ain't cheap. We go for the atmosphere, the great looking women, excellent food and the best bar tenders in the city.

  • Report this Comment On August 31, 2014, at 11:23 AM, andyboo1964 wrote:

    Texas Roadhouse is in the top 2 for what reason I know not why. The one & only time I went there it was as if we were on a conveyor belt that started at the front door, looped through the building & sent you packing out the side door within 30 minutes for a party of 9. I do not remember tasting the food it was thrown at us so fast. Everything about the place was rush. rush, rush, & rush some more. If they all run by this principle then I do not understand how they got such a high rating.

  • Report this Comment On August 31, 2014, at 11:35 AM, Grandmabooboo wrote:

    Texas Roadhouse was 2nd??? I'll NEVER eat there again....took my daughter there for her Birthday last January....ordered my steak "medium"....it came out burned to a crisp. I'm pretty flexible....I'll eat a steak if it's cooked anywhere between medium rare to medium well, but raw of incinerated...NO. I don't send my meals back to have "mistakes" corrected because I'm too aware of how some people react to NOT having their work praised...even when their work is bad. So, it spoiled the meal for not just me, but for 7 others in our party. It's always so simple to JUST CHECK that the steaks have been cooked property BEFORE they're served. It's embarrassing to be singled out...have the manager hovering over you....as if you're incapable of reading the little wood stick which clearly says "MEDIUM"...and knowing that the steak on your plate is black on the outside...and dark brown and DRY as a bone on the inside....and then acting like YOU'RE being unreasonable for expecting to get somewhere close to what you ordered. And....$15.80 is the average per person bill? Our steak dinners....which are not out of line with the prices at other steak houses (Outback and Long Horn) were $22, then add drinks! Not surprised at a $7 margarita on Sunday afternoon, but $4.29 kid drinks are a little ridiculous, BUT...I don't normally include any bar charges as the cost of a "meal".

    All I know is....I'm glad that hubby prefers Outback, that's where I'm taking him for his Birthday steak dinner next week.

  • Report this Comment On August 31, 2014, at 11:40 AM, crernst1111 wrote:

    Morton's was bought by Landry's and they pretty much dropped quality for profit. A shame....

  • Report this Comment On August 31, 2014, at 12:06 PM, sporked wrote:

    Capital Grill is not cheap. I would go to a local place first. If your traveling, its a good place to go because you know what your going to get, but so are the others. It all comes down to what you want to spend. You may question the rating position in quality, but the ratings here are definitely rated in cost.

  • Report this Comment On August 31, 2014, at 12:31 PM, clchapman wrote:

    We have eaten at Logans's and Texas Roadhouse

    Like some of you I never send a meal back. If I eat it I pay for it period. I then tell the manager what was wrong with the meal and by not accepting taking anything off he knows it is a genuine complaint and not just me wanting something at a reduced rate or free

    I have had some bade experiences at both of these places as for food being wrong but never felt rushed and management has always offered to make it right

    I will say all of them have some places that are not good so if you try another one usually they get it right

    We have two of each near us one we will never go back to the other 2 we are repeat customers

    We always give eateries a second chance

  • Report this Comment On August 31, 2014, at 12:38 PM, BrianPan wrote:

    My first visit to Capital Grille (and only so far) was in Garden City, Long Island around 7/14. I didn't even know then that it was a chain. I almost went to Ruth Chris first and found out that they're franchised so typically quality is uneven across sites. The Capital Grille I went to was absolutely beautiful inside. My one and only complaint was that the pair working the host stand were snooty. The manager came over to my table at the beginning and introduced himself. Then he came back to ask how my wine was. Then he came back again with a perfectly cooked, delicious filet mignon after the first one was cooked well done (unfortunately). He was profusely apologetic but he, also, comped my steak. My server (a young lady originally from Jamaica) was the most professional, engaging server I have ever had (after a lifetime of eating out due to business travel). All of the food was exquisite; the only downside was the check (quite high). This restaurant reminded me of pre-1985 restaurants where food, quality, decor and professionalism actually counted for something. Would I go back? In a second. But in a way I'm glad there is not one around where I live because I would go broke.

    The one question I have (and this has happened to me alot) for all steakhouses is how can you screw up a steak, i.e. too well done or too rare when that is supposedly your specialty and typically 70-80% of the entrees you serve?

  • Report this Comment On August 31, 2014, at 12:40 PM, jomase wrote:

    Never had a bad time at Texas Roadhouse.. It all depends on where they're at and who's running it at that time.. I noticed that with other chain restaurants. one will be crappy, go to a different one that one would be great.

    Location location, location.

  • Report this Comment On August 31, 2014, at 1:26 PM, ColonelCalabash wrote:

    I would prefer that Mortons in Nashville Tn. go totally broke and out of business. After being so rude to a cancer patient that spent over $2000 in one group sitting at the place, the management ask them to leave over the hat the patient was wearing. Also they have a no firearms policy and I don't support businesses that take my rights just to business with them.

  • Report this Comment On August 31, 2014, at 1:42 PM, tahiti5000 wrote:

    If you want a good steak, avoid Texas Roadhouse, Longhorn and Outback. They serve low-quality meat and I would rather pay more for a really good steak than eat at one of the mediocre chain restaurants.

  • Report this Comment On August 31, 2014, at 1:45 PM, Teenahum wrote:

    Here, in Sarasota, Florida, our favorite steakhouse is Flemings. I have only been to one other Flemings in Scottsdale, Arizona. Both of these locations have been very good through multiple visits. The Sarasota location, however, is one of my all-time favorite places to have steak. The customer service is top notch. If you have a good experience with the wait person, you can request them at your next visit. I like my filet medium-rare and have never been disappointed. When I do go to one of the restaurants on your list, (I have never heard of Capital Grille) I do not order steak. It just isn't worth the risk of a disappointing meal.

    Also, here in Florida, we have Publix Supermarkets. Their Prime steaks, while more expensive, are truly a treat to have at home.

  • Report this Comment On August 31, 2014, at 2:05 PM, cdt1950 wrote:

    Outback has fallen by the wayside. I went to two different Outbacks and had the worst meals and service of my life. Used to be my favorite steakhouse. I don't call the Home Offices of place, but found it necessary in this case. They were courteous and offered to send me gift cards to come back. Not. From now on it's Longhorn or Texas Roadhouse. Never had a bad meal there. I believe it all depends on the staff and cooks. Pay $69-$76 for a steak meal????? I'll cook one at home!

  • Report this Comment On August 31, 2014, at 3:24 PM, M1k3G wrote:

    So WHY is The Capital Grille the most popular steakhouse? I clicked on the title to see what they did better than everybody else, but there was barely a mention. This article was definitely below expectations.

  • Report this Comment On August 31, 2014, at 3:39 PM, elsiebells wrote:

    Longhorn in Louisville KY is always consistently delicious. Outback was our favorite before that but, we stopped going there a few years ago. The quality of Outback went way down. The last 2x we dined there we ordered filet mignon and both times we received sirloin or at least, that's how it tasted and cut.

  • Report this Comment On August 31, 2014, at 4:19 PM, Taz wrote:

    Took Marine son to a Texas Roadhouse in NC a few years ago and once was enough. Meals were both terrible - son, who is a veracious eater, ate about half his and I ate less than that. Expensive mistake.

    Outback was crossed off our family dining list years ago. Their two outlets near me both declined in service and menu offerings and the Bloomin' Onion didn't make up the difference.

    Steak is one thing I can buy and cook at home much better than most restaurants so I don't go out any longer for steak. I go out for food others can prepare better than I.

  • Report this Comment On August 31, 2014, at 4:54 PM, pwm02176 wrote:

    Gene and Georgetti's in Chicago....my fav but there is also a very good steak house in Bath, Maine "Admiral's Steak House" Close to home for me.

  • Report this Comment On August 31, 2014, at 5:12 PM, danbhart wrote:

    Used to go to steak houses. Now, we buy a good quality line of beef and my wife grills it better than the restaurants do. We save money and eat better. They can keep all those overpriced slop holes.

  • Report this Comment On August 31, 2014, at 5:24 PM, stevo6678 wrote:

    I agree Outback has gone down hill but our favorite is Flemings as the service, wine list and food is the best but a bit pricey.

  • Report this Comment On August 31, 2014, at 5:51 PM, smpeairson wrote:

    Perhaps I am a cynic, but I never expect a quality dining experience at ANY chain restaurant. Rarely, if ever, is a chain restaurant my first choice when dining out. The cost of eating out has gotten so expensive that a bad experience is more than a minor annoyance.

  • Report this Comment On August 31, 2014, at 6:23 PM, deshawk wrote:

    Long Horn here in Phoenix is excellent.

    We enjoy their food often. We have never

    been disappointed.

    We are also blessed with Fogo de Chao, an excellent meat experience... pricey, about $75 per person, but wonderful and we go there on special occasions. Look it up.

    We've tried LoneStar and Logan's and Outback...

    We were not pleased. We'll stay with Long Horn and Fogo. We don't have a Capitol Grille

  • Report this Comment On August 31, 2014, at 8:59 PM, golf714 wrote:

    Long Horn, has gone to, SOUS VIDE, Cooking. They used to have a 38% return on overcooked steaks. Example...Each Steak is in a Vacuum Pouch, and heated to...say, if you want Medium Rare, 125-140 degrees....then SLAPPED ON THE VERY VERY HOT GRILL FOR 1 MINUTE EACH SIDE!!!

    PERFECT STEAK!

    AWESOME STYLE OF COOKING...BULLETPROOF!!!

  • Report this Comment On August 31, 2014, at 10:09 PM, GeaugaTruck wrote:

    We are blessed with a Texas Roadhouse, a Longhorn Steakhouse, a Girves Brown Derby, a Mortons Steakhouse, a Flemings Prime Steakhouse, a Hyde Park Steakhouse, and two smaller chains, Red The Steakhouse, and XO.

    Texas Roadhouse is the best bang for the buck. Longhorn, and Brown Derby try to compete dollar wise, but fail, and the rest are way out of the realm of reasonably priced steaks.

    Making up for the total lack of ambiance and loud country music, you can get a really good, tender hunk of beef at TR. I can get out of TR for $20.00/per head most of the time.

  • Report this Comment On August 31, 2014, at 11:51 PM, williethem wrote:

    I've eaten at Ruth's Chris in Los Angeles area, Baton Rouge, Dallas, Pittsburgh, Las Vegas, and ours here in Kansas City (unfortunately, the KC one has closed due to lease problems), and all have been very consistent in quality and preparation. I rarely eat a steak anywhere else. A once or twice a year thing, as it usually runs $85/person. My wife cannot have any pink in her steak, and Ruth's Chris is the only place that she hasn't had to send one back.

  • Report this Comment On September 01, 2014, at 12:04 AM, barbarakearney2 wrote:

    Just returned from dinner tonight with some friends at Black Angus. They are a chain here in AZ, not sure if they are in other parts of the country. The food was great, the service was fine, and the best part of it all was it was quiet and you could actually have a conversation with out raising your voice. There was no music going,no loud noises etc. All their tables are set up like booths/little compartments no open concept seating like just about every other restaurant seems to be using these days. Absolute favorite place to go for a steak here in Phx. Keep up the good work Black Angus!!

  • Report this Comment On September 01, 2014, at 12:34 AM, jackweho wrote:

    The Palm, Morton's, Flemings...in that order. To Goldenboys...do they spell Capital Grill differently in Boston...Grille has an "e"

  • Report this Comment On September 01, 2014, at 2:23 AM, tstorey1 wrote:

    At $73 per person I wonder how an expense account restaurant like Capital Grille made it onto this list.

    The difference on grading of the cuts of meat served is immeasurable.

    My BMW 535 is waaay better than your Chevy Malibu....obviously.

    The expense account restaurants have been slogging since '08 and must be watched as the Vice President of your division will cut his execs' restaurant budget before anything else.

    An a la carte $52 sirloin is not a "necessary expense" during budget meetings.

    As far as Texas Roadhouse, Outback etc are concerned, their product quality can only be rated as "fair."

    Not enough all natural/organic product to be considered long term players in the market. 1980's business models will continue to age poorly.

  • Report this Comment On September 01, 2014, at 9:20 AM, fuskiegirl21 wrote:

    I love Morton's but the last time we went there we only had one glass of wine each and our tab was $242.00. I don't know many middle/or upper class people that want to pay that much for dinner all the time. For a special treat "yes" but not all the time. We do go to Longhorn frequently.

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