Beloved Burger Chain Steak 'n Shake Continues Its Closing Spree
Though Steak 'n Shake has long withstood the test of time with roughly 90 years in business under its belt, the last few years have raised major doubts about its future. The beloved regional burger chain, primarily located in the Midwest and known for steakburgers and decadent milkshakes, has faced complaints about its service and quality for years. In 2021 it teetered on the edge of bankruptcy before parent company Biglari Holdings managed to pay off a whopping $153 million in debt. Though Steak 'n Shake did manage to turn a profit in 2022, it hasn't been able to reverse a trend of restaurant closures that continued into this year.
There were 493 Steak 'n Shake restaurants as of March 31, 2023, according to the latest report from Biglari Holdings. For comparison, there were 534 Steak 'n Shake restaurants as of March 31, 2022. This means that the burger chain's net restaurant count has decreased by 41 locations in a year—and the decline is even more severe when you look back further than 2022.
Per QSR, Steak 'n Shake ended 2018 with 626 locations, so the chain is now down more than 130 restaurants in less than five years.
To make matters worse, not all of Steak 'n Shake's 493 restaurants are currently operational. Of the brand's 172 company-owned restaurants, 36 were closed as of March 31 this year, according to the Biglari report. Steak 'n Shake has contracted to sell seven of those 36 stores and listed another 17 with real estate brokers for lease or sale. Biglari said it plans to refranchise the remaining closed stores.
While this continuing decline in store count paints a grim picture for Steak 'n Shake's future, the brand isn't content to quietly fade into obscurity. Steak 'n Shake has invested $50 million into revamping its business by transitioning from full table service to a counter-service model where customers can place orders through kiosks, Restaurant Business Magazine reported.
Biglari Holdings CEO Sardar Biglari reported promising signs of success with the transition in a February 2023 letter to shareholders. The switch has boosted productivity in restaurants and annual sales per employee have jumped from about $64,000 to nearly $131,000, Biglari said. Steak 'n Shake's resulting cost savings "have largely been passed on to customers through low prices, and to associates through higher wages," he added.
It remains unclear if Steak 'n Shake will be able to avoid even more restaurant closures in the future, but in the meantime, the brand isn't compromising on its ambitious goals to be the best in the business.
"Our aim is to be the most productive, hospitable restaurant company in the industry," Biglari said in the letter to shareholders.