Steak n Shake closes 13 more restaurants amid slowing customer traffic

Steak n Shake showed improvement in the third quarter, despite closing 13 more restaurants and seeing customer traffic plummet.

The Indianapolis-based restaurant chain suffered a loss of $63,000 during the fiscal third quarter ended Sept. 30 compared with a loss of $861,000 in the same period of 2019.

The chain lost $1.1 million in this year’s second quarter and $11 million in the first.

Revenue plummeted to $78.8 million in the quarter, down from $141.3 million a year ago. Through the first nine months of the year, revenue has fallen to $272.6 million compared with $478.9 million during the first nine months of 2019.

Steak n Shake has permanently closed 82 restaurants in 2020, and another 37 company-owned stores were under temporary closure as of Sept. 30.

Same-store traffic dropped 54.2% in the third quarter and has fallen 44.6% so far this year.

The chain had 528 total stores as of Sept. 30, consisting of 260 company-owned stores plus 69 operated by franchise partners and 199 by traditional franchisees.

Last year, Steak n Shake started transitioning company-owned restaurants to single-unit franchise partnerships. As part of that plan, it “temporarily” closed more than 100 locations as it sought franchise partners. The company converted 18 more stores to corporate partnerships in the third quarter.

Biglari Holdings, the chain’s parent company, reported an overall profit of $21 million even though revenue shrank from $141.1 million to $79.7 million. The profit was largely due to $27.6 million in investment gains.

Biglari Class B shares rose 16.7% Monday morning, to $100.23 each. Class A shares were up 3.8%, to $490 each.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

26 thoughts on “Steak n Shake closes 13 more restaurants amid slowing customer traffic

  1. This is the problem of hedge funds buying mature businesses. Mr Buglari never had any restaurant experience nor had owned any. He has driven this midwest icon into the ground. He chased the wrong target; take out 4 for $4. It was always a better restaurant than that; he just didn’t see or understand it. If he was a decent human being he’d put the remaining chain up for sale and keep 20% of the company and the it’s profits. The problem with hedge funds is they take out their profits at the beginning and load the company up with debt, all the while walking away with fees. Mr. Bulgari, thanks for nothing.

    1. same thing is going to happen with Bob Evans. Never a smart idea for equity firms to get into the restaurant business …..

    2. The other problem is, his first move (making the chain more efficient) worked. They made money for several quarters in a row … right until the push for more & more “efficiency” cut into the food product and service. Which either due to ignorance or stupidity, he ignored.

      As you said, he doesn’t care, he’s made his money. The whole chain has big loans due within a year and the most likely outcome is they shut down and blame COVID for their issues. COVID has killed a lot of businesses, but SnS ain’t one of them.

    1. And this clown (Biglari) wants a seat on the board of Cracker Barrell, who is resisting it. Hopefully the stockholders follow the board’s recommendation & defeat him. Would hate to see the same thing happen to CB as happened to S&S.

  2. S&S service has stooped to an all time low. A month ago I pulled into the drive thru line and was told it would be at least 30 minutes before they could fill my order. Last time ever for me. Sad to see the Steak & Shake of my youth no longer exists. Thanks for killing off a once proud restaurant chain, Mr. Biglari.

  3. People would rather pay a little more and get a sizeable portion. My favorite dish used to be “Chile 5 way.” About 5 or 6 years ago they started reducing the size of what was served. Ultimately it was about 1/2 the size it used to be. They skimped on other items and the low prices still seemed like you were getting gypped. If you want to get an actual “steak burger” you don’t go to Steak and Shake, you go to “Freddy’s.”

  4. Not all SnSs are lost. If you’re craving SnS and want it quick and right, the one in Plainfield, on SR267 just north of I70, is still very good. I was there today and their service and food is very consistent. As for Biglari, yeah, he’s a narsissistic DB and destroys just about everything he touches.

  5. Go back and look at every statement he made when he wanted the board of SS to let him run the country. Look at the criticism he made against the existing board and management This is what communists/socialists do to gain Control of things. He and his ilk are pathetic. He took a great brand and personally destroyed it.

    1. Pretty sure Biglari is a capitalist, running a public company as if it’s his private vulture fund.

  6. While reading this article I was thinking in my head what everyone else has already posted.

    I will simply add that the demise of this great brand began to take shape when Biglari fired the local ad agency responsible for the light-hearted commercials. Then another misstep was replacing real ice cream for powder.

    Biglari has no clue who the customer is (was).

  7. Still waiting for “journalists” to talk about SNS’s puppet board. Print their names, photos, day jobs, and whatever other boards they are on. I doubt any of the puppets would actually speak, so fill the article with the number of closures and jobs lost. Also review how Bulgar carved his name into SNS with a multi million $ penalty.

    1. Dude…IBJ has already reported on Biglari’s self serving deals. That’s how you know about them, duh.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets on
{{ count_down }}