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Texas Roadhouse revs up Bubba’s 33

With same-store sales nearly double those of its big sister in Q4, Bubba’s intends to expand by 25% in 2020.
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Texas Roadhouse is accelerating expansion of its Bubba’s 33 casual-dining concept after the secondary brand generated a 7.1% gain in same-store sales for the fourth quarter, in part through the selective addition of lunch service.

Comps for the company’s namesake brand grew 4.4% at the chain’s 484 corporate stores and 3.4% at domestic franchised units during the quarter.

About 2 points of the increase came from the addition of lunch at five of the 28 Bubba’s 33 units that were open at the end of 2019, according to Roadhouse CEO Kent Taylor. But he quashed any speculation that the company’s namesake brand may be open to trying midday service, telling analysts, “No way are we going to add lunch.”

The affirmation of Texas Roadhouse’ no-lunch policy came as a number of other players in casual dining are looking to increase their midday sales and traffic through special deals and menus sporting items that are quick to prepare. Texas Roadhouse has been a dinner-only concept since it was founded by Taylor, a proud contrarian on trends such as delivery.

Lunch works for some Bubba’s units because the concept’s menu is more “lunch-friendly,” Taylor said. The bill of fare includes midday staples such as burgers, sandwiches, salads and pizza.

Roadhouse plans to open seven Bubba’s restaurants in 2020, along with 13 Texas Roadhouse outlets. The company did not reveal its growth expectations for Jaggers, a two-unit fast-casual concept that specializes in chicken sandwiches. Management said in revealing results for Q3 that the company intended to open two more of the limited-service stores.

The company opened two Bubba’s units and nine Texas Roadhouses in 2019.

The 2020 expansion targets do not include the relocations of six Texas Roadhouse restaurants. “Over the last several years, we have successfully relocated a handful of high-performing restaurants to larger sites with more parking, which has allowed us to build bigger—a bigger building with more seating capacity—and typically obtain better lease terms,” Taylor said.

Simultaneously, Roadhouse intends to build about 25% of its new namesake restaurants in small markets. Tests have shown that those stores tend to match the sales and customer volumes of units in more populous markets, company officials said.

The executives revealed few new initiatives for the Texas Roadhouse brand, but noted that its menu prices will likely be raised 0.5% to 1% at the end of March.

The company posted a Q4 net income of $42.7 million, a 40.7% increase from the year-ago tally, on revenues of $725.2 million, up 19.7%.

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