Restaurateurs’ arms must be getting sore from all the self-flagellation.Luckily the truly spasmed can pass the rod to any number of would-be de Sades for a few more licks, from investors to health advocates, politicians, animal-rights groups, eco-terrorists, chain haters or your garden-variety scold. This is no time for high spirits or a positive outlook on a business so hard-pressed,or at least that’s the prevailing sentiment.
That’s why you have to give a big woot-woot to G.J. Hart and his team at Texas Roadhouse, the publicly traded steakhouse chain. Last week the company spent upwards of $2 million to gather 1,000 chain standouts for a five-day fest in San Francisco. They stayed at The Fairmont and The Ritz-Carlton, enjoyed events like a barbecue and a Summer of Love-themed party, and cheered on the five contenders in the annual Roadhouse Meat Cutting Challenge (the top cleaver heaver wins $20,000 and a year’s worth of bragging rights for his store.)
The celebration was so out of sync with the dourness of the times that it snagged coverage on CNBC’s Squawk Box, the financial network’s primetime show for investors. Reports also showed up on the CBS affiliates of major cities and in media like the High Plains Journal in Sioux Falls, S.D., and station KXMB in Bismark,N.D.
The coverage posed an obvious question: Isn’t this kind of indulgence inappropriate for the times? Was the 325-unit chain pulling the sort of move you might have expected from an AIG?
“People are the biggest asset we’ve got,” CEO Hart explained on Squawk Box. “The investment in our people will yield us big returns.”
He indicated that the investment may be even bigger than other coverage let on. In addition to spending from $2 million to $2.5 million of the company’s travel budget on the five-day event, another $1 million in supplies and effort would be put into local charities; a full day would be spent by the participants in a giveback to the host community, even though Texas Roadhouse has only three restaurants in all of California. Just one is in the greater San Francisco area.
But giving back, Hart explained, is part of the company’s philosophy and culture. It’s all about feeding that spirit and nurturing a sense of hospitality, which will ultimately help with sales and traffic.
Gauging the effects on morale and motivation while the conference was still underway, Hart told Squawk Box that he was already seeing “a great return on investment.” You have to raise a cold longneck to leadership like that.