Steak 'n Shake, the restaurant that made a name for itself serving hand dipped milkshakes
and prime burgers, has seen its share of turmoil. And now, the company is facing even more adversity,
as it becomes yet another victim of the COVID-19 pandemic.
Steak 'n Shake announced that it has permanently closed a total of 57 locations across the
country 51 of the restaurants were company-owned, and six were franchised. To offset losses
caused by coronavirus shutdowns, Steak 'n Shake's owner has also sold one restaurant
to a franchisee, and 10 stores to its operating partners. The closures are the latest problems
to hit the chain, which has changed owners several times. As of mid-May 2020, the locations
of the shuttered restaurants have not been announced.
The company explained what prompted the restaurant's slowdown in its quarterly report, saying,
"As of March 31st, 2020, 62 of the 306 company-operated stores were temporarily closed. As of March
31st, 2019, 44 of the 408 company-operated stores were temporarily closed. The COVID-19
pandemic has adversely affected our operations and financial results...The COVID-19 pandemic
could cause disruptions to our supply chain. Moreover, we cannot predict how the outbreak
of COVID-19 will alter the future demand of our products."
Steak 'n Shake was born in Normal, Illinois, after its founder Gus Belt decided to abandon
his idea of opening a fried chicken and beer restaurant next to a gas station. Belt's new
idea was simple: to serve freshly ground burgers made of steak to his guests. To drive home
the quality of his burgers, he would wait until the dining area was full before pushing
a wheelbarrow full of T-bones, sirloins, and round steaks across the room. According to
Restaurant News, Belt would then start grinding the meat in front of his customers to make
his famous Steakburgers.
Pushing a wheelbarrow with steak through a crowded restaurant wasn't the only thing he
did. He also created an open kitchen so customers could watch their Steakburgers being cooked,
and for this he coined the motto,
"In Sight It Must Be Right."
"I come to Steak n Shake because I love it."
According to Mental Floss, Belt also liked going through his customer's discards to find
out what they weren't eating, and used this insight to tweak his menu.
Belt stayed at the helm of his restaurant until he passed away in 1954 and left Steak
'n Shake to his wife, who operated the chain until 1969, when she sold her part to Longchamps
for $17 million, a company that had visions of turning Steak 'n Shake into a fast food
restaurant. The brand changed hands again in 1971 when
it was sold to Franklin Corporation, and under their stewardship the chain grew to 130 locations
across the country by 1975, as Restaurant News reported.
The chain went back to its roots after a new owner, E. W. Kelley and Associates, took it
over in 1981. The New York Times reports that at the time, the group was known for buying
up underperforming companies and trying to fix them up. According to Mental Floss, group
head Ed Kelley, who is something of a legend in the food industry for his work on famous
brands like Tang, Klondike Bars, and Cool Whip, is also credited for turning the restaurant
around at the beginning of the 21st century, before he passed away in 2003.
Steak 'n Shake has definitely seen better days. The restaurant that inspired the birth
of Shake Shack is nowhere near as successful as its upstart competitor is today. The brand's
current owner says the chain's lackluster performance in 2019 was a "drag" on its overall
results, and that its numbers in the last three years have gone from bad to worse. According
to the quarterly report, net sales decreased by nearly 37 percent, and franchise royalties
and fees by nearly 22 percent, during the first quarter of 2020.
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