Most Steak n Shake customers dutifully follow the restaurant's "Order our name" advice.
They choose "steakburgers" and hand-dipped milkshakes–the namesakes that helped build the Indianapolis-based company into a nationally recognized brand with 478 locations in 19 states.
But as more people seek out healthier food and become conscious of high fat and calorie counts in Steak n Shake's staples, some are staying away or not visiting as often.
To fight back, the chain is working on a barrage of healthier menu options, including yogurt shakes, chicken sandwiches and new salads. Perhaps a variation on the slogan that started it all in Normal, Ill., in 1934 is in order: "In Sight It Must Be Light."
The first leaner products to launch–Fruit n Frozen Yogurt milkshakes–contain about half the fat of standard shakes and more than 100 fewer calories (although they're not exactly health food, at roughly 500 calories and 10.5 grams of fat). In just over a month on the market, the yogurt shakes already make up 25 percent of shake sales.
The chain also is testing a line of thin chicken sandwiches that can be ordered much like hamburgers–in singles, doubles and triples. New entree salads are on the way. And the company, without fanfare, has removed trans fat from its French fry cooking oil.
It's all part of a delicate effort to make Steak n Shake more of an everyday dining destination and less of an occasional treat without alienating tried-and-true customers. The publicly traded company hopes a lighter menu will help boost same-store sales, which fell 1.7 percent in its latest quarter and 3.4 percent in the quarter before that. Other promised improvements include a fresh menu design, speedier drive-throughs and new breakfast offerings, including better coffee.
"We think people should be able to eat at Steak n Shake as frequently as they'd like, regardless of their dietary considerations," said CEO Peter Dunn, 51, who took over the company in 2002. "Providing a healthy choice is both the right thing to do and, we think, will also provide a good business opportunity."
Other than small additions–like the introduction of Side-by-Side milkshakes and premium burger toppings–Steak n Shake has made few changes to its menu over the years and has been "a little behind" on healthier options, said Bryan C. Elliott, an analyst with St. Petersburg, Fla.-based Raymond James & Associates.
"This seems like a more comprehensive effort," Elliott said of the latest salvo.
Most recent milkshake innovations have added calories to the standard chocolate, strawberry and vanilla flavors. Double-Chocolate Peanut Butter Sippable Sundaes contain 901 calories, while Bits n Pieces Milkshakes with M&Ms tip the scales at 964 calories.
In a January report, analyst Jack P. Russo of St. Louis-based A.G. Edwards said the menu upgrades are overdue. In the report, he downgraded the company's stock from a ranking of "buy" to "hold."
"No word on when these [new offerings] will hit the menus," he wrote, "but suffice it to say, the sooner the better given the recent same-store sales softness and the lack of meaningful menu upgrades of late."
Steak n Shake is just getting started on the health front, but seems to be heading in the right direction, said David E. Tarantino, a senior research analyst with Milwaukee-based Robert W. Baird & Co.
Tarantino is forecasting gradual same-store sales growth in 2007 thanks in large part to new products.
Fueled by the opening of new restaurants, Steak n Shake's revenue has grown steadily over the last three years, reaching $639 million in the fiscal year that ended last September. But slumping same-store sales have knocked 15 percent off the stock price since it topped $21 last March. Shares closed at $17.64 on Jan. 31.
"If you look at the success others have had in this area, like McDonald's, it does indicate consumers are interested in healthier options," Tarantino said.
The launch of the McDonald's Snack Wrap with chicken strips helped that company achieve impressive same-store sales growth of 5.7 percent in 2006.
But for Steak n Shake, is there a risk of alienating loyal customers who just want a burger and a milkshake? Hamburgers account for about 30 percent of Steak n Shake's sales, and about 55 of every 100 customers order a shake.
"There's always risk, but I think the risk is fairly low," Tarantino said. "These initiatives eliminate that veto vote and allow someone who might have taken a pass before, to visit."
Gus Conner doesn't have much interest in yogurt shakes or salads, but that won't stop him from visiting Steak n Shake.
He and fellow FedEx pilot Wes Erb stopped by the downtown location for burgers and chocolate milkshakes on a recent afternoon. They were in town from Anchorage, Alaska, for a few hours and needed something to hold them over until dinner.
"I came here for the old standbys," said Conner, 48.
Erb, 39, said new menu options are a good idea, if for no other reason than to give customers a way to indulge without feeling so guilty.
"It gives you that feel-good feeling," Erb said with a smirk. "Like rearranging deck chairs on the Titanic."
Rest assured, "Famous for Salads" won't soon replace "Famous for Steakburgers" as the company mantra. The chain isn't giving up the confident swagger of its promotional campaigns, either.
Its strategy is healthier food, with Steak n Shake style. TV commercials promoting the yogurt shakes proclaim, "Oh, I couldn't. Oh, I could." And even place mats on the restaurant's tables play into the health-related dilemma customers face: "Something (What was it? Who knows–it doesn't matter now) was holding you back. But now, we're using lowfat frozen yogurt."
Selling shakes with fewer calories and less fat is an improvement, but could give false comfort to diners, encouraging them to consume more, said Richard D. Mattes, a professor of foods and nutrition at Purdue University. Ultimately, he said, whether a reduction in calories results in better health depends on the consumer.
"It is going to take an educated consumer to use these products wisely," Mattes said.
Steak n Shake is working to respond to consumer trends and compete in the "permissable indulgence" area without repositioning the brand, said Doug Willard, vice president of consumer insight and innovation.
Among other new products in the works, chicken sandwiches are being tested in Louisville and will soon expand to Nashville, Dunn said. Market testing for a handful of new salads also is expected to begin this year.
"There are a lot of people who want to come to Steak n Shake more often, but some member of their family says, 'We can't go there again because I want a good salad,'" said Dunn, whose favorite shake is the strawberry-banana Fruit n Yogurt.
Unless he's not in a "healthy mood." Then Dunn chooses the Side-by-Side with peanut butter and chocolate.
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