More than 100 Steak ‘n Shake stores remain closed as the company faces poor sales.
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The chain had 413 company-run restaurants and 213 franchises in 2018, compared to the 302 corporate stores and 217 franchises it has now. That could be due to a dropoff in customers: Same-store sales in the third quarter fell more than 6 percent year-over-year.
Overall in-store traffic dropped more than 13 percent.
For the first nine months of this year, according to QSR Magazine, the brand’s revenue is down a whopping $22 million versus $1.5 million in the comparable period a year prior.
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Steak ‘n Shake has also said it’s cut back on some expenses in an attempt to even out operational costs. Third-quarter marketing accounted for about 5 percent of total revenues this year versus the more than 7 percent spend on ads in the same time frame last year.
The company began a refranchising campaign last August with the goal of building a system of single-unit, operator-run stores. That’s not unlike the system big brands like Chick-fil-A and McDonald’s operate, allowing a collective of restaurants run as individual units instead of a multi-unit system where certain markets may get overlooked.
The company said it would work to improve the production and speed of service to compete with more convenience-themed fast-food chains and place an emphasis on its drive-thru and takeout, the latter of which rose 51 percent in revenue in the past decade.
Steak ‘n Shake said in a statement that it plans to reopen the closed stores, though there is no immediate timetable for that. “Although the company is committed to the franchise partnership model,” per the statement, “future impairments are possible.”
Texas-based Biglari Holdings Inc. owns Steak ‘n Shake. Its stock is down more than 5 percent on the year and 26 percent year-to-date.