This Burger Chain Just Turned a Profit For the First Time In Years
There is renewed hope for the future of the beloved but declining chain Steak 'n Shake. After years of dwindling sales, store closures, and a brush with bankruptcy in 2021, the burger slinger has finally reported that things are on the up and up.
Steak 'n Shake's parent company, Biglari Holdings, released its annual letter to shareholders over the weekend, confirming that Steak 'n Shake (along with sister chain Western Sizzlin Steakhouse) netted $11.3 million in earnings this past year. It's the chain's first year of profitability since 2017.
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Improvements in Steak 'n Shake's business model helped return the company to profitability, wrote Sardar Biglari, CEO of Biglari Holdings. In response to the growing demand for off-premise dining, Steak 'n Shake has been reimagining itself in the past few years as a counter-service brand.
Paring down its menu to the basics—like its famous Steakburger and milkshake combo—and phasing out other full-service features like waitstaff and silverware, Steak 'n Shake has outfitted many of its restaurants with self-order kiosks. The remodeling has, so far, cost $40 million.
But it appears to be paying off. Comparing Steak 'n Shake's redesign to the work of the Italian Renaissance painter Michelangelo, Biglari reported "per employee" annual sales increases of over 80 percent. He also said that cost savings had been passed onto customers and employees, in the form of lower costs and higher wages.
As Restaurant Business points out, there is probably more to Steak 'n Shake's profitability this past year than Biglari lets on. In addition to the cost-saving pivot to counter-service, Steak 'n Shake also saved quite a bit on store closures in 2021, writing off $19 million less in "impairments" than it did in 2020.
The company also restructured its franchise model, selling off more than a quarter of its company-owned locations (at $10,000 a pop) to "franchise partners"—a new, more competitive class of store operators who split restaurant profits with Steak 'n Shake.
But whatever the cause of Steak 'n Shake's success in 2021, fans of the legacy brand will be pleased to know that their favorite Steakburgers won't be going anywhere anytime soon. And they're easier to get than ever . . . if you know your way around a self-order kiosk.
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