TXRH
#Hey, <UNK>.
This is <UNK>.
We might do that if it's a wage rate challenge.
We have actually where you've got, let's say, Alaska or California, maybe in New York, where you've got mid-year pretty big wage rate changes, we might do something in those states.
And we might do it in multiple parts.
We might do it in one whole swing.
It varies.
In the past, we've taken multiple price increases throughout the year if the cost structure changes in a certain way.
But if it's something where we think the prices of some item like beef are coming back down throughout the year and if we are floating a lot of product, we might not take the price increase sooner, if you will, to offset that.
We'll be patient and let that play through.
And so ---+ which means maybe our guys are losing a little bit in Q2, maybe are winning a little bit more in Q3 and Q4.
So we will look at all the angles on that stuff.
I would tell you it depends on how they bought their beef last year.
Were they locked in.
Were they floating.
It also depends on how they are buying it this year.
Are they locked in.
Are they floating.
You sort of can't look at just one quarter.
I would look at what their full-year forecasts are for inflation in those commodities.
And then lastly, I would tell you are they using the same cut of beef year to year, or have they changed the type of beef that they are buying or something in their process.
And I would reiterate what <UNK> just said.
I think you'll find that some of the competitors that maybe used to be selling choice steaks are now selling select.
It could be, depending upon what the cuts are.
Wow, I wish I had a crystal ball to forecast what beef would be a year from now, but we really don't.
We go to the suppliers, and they will give you a contract for next year right now, but it would be significantly higher versus what we think we are going to pay for the overall year, so it's really tough to know.
Say three out of four years, we win the way that we play the game.
And then maybe one year the way we play the game, we don't really hit it like we thought we would.
But that's how we've done it over the last 10 years, and in general we do quite well with it.
Yes, I think it's just sometimes we know going into the year we're not going to take enough pricing to offset inflation.
And so we're going to need to grow traffic quite a bit dollar for dollar.
We're going to make up that difference, and we've grown traffic quite a bit.
And we think based on our sales growth, we are doing a lot of the right things.
Sometimes you take a little bit on the chin in the short term to keep things going great in the long-term.
And our average unit volumes now are going to pass $4.5 million this year.
I think it's more than $1 million more than most of who you would consider to be our steak competitors.
So we think we're doing some things right with this long-term approach we're taking to balance the equation of pricing versus the cost of running the business.
Yes, we're not going to give exact numbers on how much we're locked or how much we're floating except to say we're floating a lot of product.
And so there is some risk there.
There is a lot of seasonal history in where beef costs go.
And there has already been a pretty dramatic change even from where beef prices peaked back in mid April, down quite a bit.
So we are believing that those trends will continue as the year goes on and you get past the Fourth of Julys, the Labor Days, and that kind of thing.
So we've got a very experienced buying team in our Company, and we're standing behind their forecast right now.
