Steak and Shake closing 57 locations

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Steak and Shake closing 57 locations

Post by Brian Lutz »

https://www.usatoday.com/story/money/fo ... 114452001/

Steak and Shake is closing 51 corporate owned and 6 franchise locations due to impacts from COVID-19. This leaves 553 locations.
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Re: Steak and Shake closing 57 locations

Post by storewanderer »

Steak N Shake has had a couple franchise locations in Reno for a while and the operations have been, not good, for most of the time these have been open. The Google and Yelp reviews going back years are humorous they are so bad... but recent reviews had been somewhat more positive. Lately I had noticed the location in South Reno looked really dead so I decided to try it for a shake during the 50% off 2 PM to 4 PM a couple days ago. Drive through only............. I was the only car there and was through it in a minute or two with the completed shake, now given how much negative commentary in reviews I see on speed, I was very pleased how fast my order went. The price is a lot higher than I remember, it is now 5.99 for a specialty shake, so 2.99 with the half price. For what it is, not a bad deal.

The menu seems to have really been cut back since before the COVID. Basically they have some burgers, a hot dog, fries, onion rings, plain chili, and that is IT. No chicken strips, no chicken products at all actually. No fish, but that is probably not a bad thing to help their oil. Most burgers do not appear to include lettuce or tomato.

I decided to go back again another day and purchase a burger to see how that would be. This time the inside was open. So I asked for the single burger and was told the total would be $6 and change. I said isn't that the price for the double burger and was told it is the same price single or double. I had looked at the online ordering before going in and saw the single burgers were priced at around 4.50 there. They did not seem to know how to sell me the 4.50 single burger via the counter in the unit. All they could do was charge the 5.90 double then do it with only one piece of meat. Not good. The place is clearly struggling so I let it go. Burger was pretty good though... again only customer there, and it took about 3 minutes for the burger. it was cooked to order and delivered in a small box (not just wrapped) well presented. Pretty good product if you like a thin burger. Bun was puffy and hot, maybe had been steamed, went with the burger well.

Inside the location it is pretty sad, basically nobody there but a few employees. I really like the inside of this building, it has a nice decor, lots of windows, and is a nice environment. Things looked real clean inside as far as counters, tables, the drink area went, but the floor was real sticky. They have eliminated the counter/stools, also drinks are now self serve but there was no iced tea, and there are no more servers. Their process for the raw burger meat was interesting. They have a cabinet refrigerator type of thing next to the grill with these little round balls of raw burger meat inside. They then have a tong or something hanging there to use to get the raw meat out then put it on the grill and smash it down and start cooking it. This is a great process compared to many chains I see where raw meat is stacked in patties with wax paper or plastic sheets and the employee has to separate the patties with their hands to get them onto the grill, change gloves between handling that and any other task, etc.

Also in the past they used to have some packaged groceries for sale like cans of chili, seasoning, and peppers. I did not see any of these items for sale anymore.

I wonder how this chain is doing after making huge cuts to item variety, eliminating table service, and having locations doing this "drive through only" program. Or maybe that stupid "drive through only" program is unique to Reno.
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Re: Steak and Shake closing 57 locations

Post by Romr123 »

I grew up with Steak and Shake in St. Louis--always growing up was a cut above (both in food quality and price) the other fast-food restaurants. Kind of sad, frankly, the gyrations of the past 10 years; last time we went was about 2 years ago for a late lunch in Sedalia, MO which was the "new format" (no table service any longer). Was nostalgic and food quality was good. TBH I don't think I'd bother with them except within a couple hundred miles of Bloomington, IL (where they started) because I don't think anyone on their fringes particularly cares any more.

I wonder if there's a process by which local chain restaurants "dumb down" as they expand. We've got a local chain here in SE Michigan that has really gone through the wringer, but has seemingly stabilized, but in kind of a split way. Olga's Kitchen is a schwarma restaurant, essentially, which serves sandwiches, soups, salads. Started in suburban Detroit 50 yrs ago by Olga. Expanded throughout region (Michigan/northern Ohio) through the 70s, generally in malls/strip malls and with waiters/table service. There were some issues with following generations, and the company stagnated badly, falling through several owners and bankruptcy. Locations, though, remained doing a steady business within the core region, even as the franchisor floundered.

One of the experienced Detroit franchisees (Schostak) bought the name/recipes out of bankruptcy, came up with a fast-casual implementation and opened several which do well even as they also have the original table-service neighborhood locations. It's an interesting duality which works (but clearly the table-service locations will attrit as leases expire etc and won't be expanded beyond Detroit) but it required a redefinition of the concept together with some thinking through the essence of the offering (which only happens with a certain amount of operational sophistication)
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Re: Steak and Shake closing 57 locations

Post by arizonaguy »

Brian Lutz wrote: May 12th, 2020, 1:24 pm https://www.usatoday.com/story/money/fo ... 114452001/

Steak and Shake is closing 51 corporate owned and 6 franchise locations due to impacts from COVID-19. This leaves 553 locations.
I didn't know they had that many. This chain has been going downhill for years and is having trouble competing against Culver's and Freddy's who are expanding rapidly.
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Re: Steak and Shake closing 57 locations

Post by storewanderer »

Romr123 wrote: December 17th, 2022, 6:44 am I grew up with Steak and Shake in St. Louis--always growing up was a cut above (both in food quality and price) the other fast-food restaurants. Kind of sad, frankly, the gyrations of the past 10 years; last time we went was about 2 years ago for a late lunch in Sedalia, MO which was the "new format" (no table service any longer). Was nostalgic and food quality was good. TBH I don't think I'd bother with them except within a couple hundred miles of Bloomington, IL (where they started) because I don't think anyone on their fringes particularly cares any more.

I wonder if there's a process by which local chain restaurants "dumb down" as they expand. We've got a local chain here in SE Michigan that has really gone through the wringer, but has seemingly stabilized, but in kind of a split way. Olga's Kitchen is a schwarma restaurant, essentially, which serves sandwiches, soups, salads. Started in suburban Detroit 50 yrs ago by Olga. Expanded throughout region (Michigan/northern Ohio) through the 70s, generally in malls/strip malls and with waiters/table service. There were some issues with following generations, and the company stagnated badly, falling through several owners and bankruptcy. Locations, though, remained doing a steady business within the core region, even as the franchisor floundered.

One of the experienced Detroit franchisees (Schostak) bought the name/recipes out of bankruptcy, came up with a fast-casual implementation and opened several which do well even as they also have the original table-service neighborhood locations. It's an interesting duality which works (but clearly the table-service locations will attrit as leases expire etc and won't be expanded beyond Detroit) but it required a redefinition of the concept together with some thinking through the essence of the offering (which only happens with a certain amount of operational sophistication)
In my limited experiences with these NV Steak N Shakes since they opened in 2013, plus one of the casino ones down in Las Vegas, I have not found the quality to be particularly different from what I had of Steak N Shake in the Midwest. I think it is a higher quality burger and shake than other fast foods if made correctly/served at the correct temperature. I always called it a poor person's Dennys (since the prices were lower than a Dennys and the portions were smaller, not so much making that comment based on food quality) in the Midwest.

At this point with how they have cut the menu down to almost nothing with their new format, they better care and they better do the few items they serve well, or they will not survive.

I can't tell if they still have locations that run breakfast. Out here in Reno, one location tried to do breakfast for a few years and it may have been doing it up until COVID hit but it isn't doing breakfast now. That location, is in a rapidly growing, lower income, growing out of control, underserved part of town. It was really the only "restaurant" out there (save for a few random strip mall mexican or chinese restaurants and a couple small casino restaurants). If I were them I'd do a breakfast program and offer it all day. But that is the polar opposite of their current direction cutting menu items.
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Re: Steak and Shake closing 57 locations

Post by storewanderer »

It seems Steak N Shake has made some equipment change in Reno. The milkshake base is now coming out of a machine (like McDonalds). The machine is a touch screen and they press the touch screen button then the base flavor (chocolate, vanilla, or strawberry) and the cup is held under the nozzle and it dispenses into the cup from the machine. Then if the shake needs any finishing (nutella, oreo, reeses, whatever) they add that manually then blend it up. This new shake can be made in a few seconds if it is plain, and about 10 seconds if it has a candy added in.

These new shakes out of this machine are, frankly, worse than a Sonic shake (and I think Sonic shakes are not great). Sickeningly sweet and do not taste like real dairy. I tried twice now as I was dumbfounded what was wrong with the first shake, then the second time watched the preparation process and saw these new machines they have. Made me wish I had gone to Wendys and gotten a frosty.

Previously Steak N Shake offered "hand dipped" milk shakes made from actual hard frozen hand scooped ice cream blended with milk/flavorings. These took a minute or two to make. Excellent quality.

If they want to downgrade the shake, it is no longer worth 5.99 for this (7.99 at the lone unit remaining out in a Denver suburb, no clue what whoever prices that is thinking).
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Re: Steak and Shake closing 57 locations

Post by storewanderer »

It appears one of the two Steak N Shakes in Reno has closed. It has been deleted from their store locator. I should have kept my mouth shut it is like I jinxed them. But I hadn't been to this closed location since about 2015. It appears the current franchisee took the location over in 2021. There is a banner at the driveway that says "under new management." I guess the reputation of this place was having some issues before the new franchisee took over and it didn't turn around.

This opened in 2013 and was the western-most location at the time but I think some CA units opened in 2014.
https://mynews4.com/news/local/steak-n- ... ns-in-reno

It appears the building was/is for sale:
https://www.loopnet.com/Listing/1140-N- ... /25674729/

Recent reviews for this location... not great. From the looks of the recent reviews it is a good thing I did not try to go there. I wanted to go there to see if the shake flavor was different/too sweet like the ones at the other Reno location the past couple weeks.

I think this location worked really well under the old "classic" Steak N Shake format of table service/drive through combined. This part of town is completely ignored/underserved by chain sit down restaurants, and it is a lower middle class area with a lot of families. The price conscious Steak N Shake "classic" format was the perfect format for the area with a table service but at a fast food price point. Also there is a lot of activity in this part of town day and night. Before COVID this Steak N Shake was running long hours and had breakfast; for a time it was 24 hours. It looked like it was doing very very high volume. So when they shifted it to a fast food format (and have been pulling the drive through only thing a lot from the looks of the reviews), well, there are already a lot of fast food places out in that part of town... in more convenient locations to where people live. Basically anyone going to Steak N Shake had to drive past 1-2 McDonalds/a Jack in the Box, and possibly a Wendys/Burger King.
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Re: Steak and Shake closing 57 locations

Post by buckguy »

arizonaguy wrote: December 17th, 2022, 8:10 am
Brian Lutz wrote: May 12th, 2020, 1:24 pm https://www.usatoday.com/story/money/fo ... 114452001/

Steak and Shake is closing 51 corporate owned and 6 franchise locations due to impacts from COVID-19. This leaves 553 locations.
I didn't know they had that many. This chain has been going downhill for years and is having trouble competing against Culver's and Freddy's who are expanding rapidly.
I was surprised they had that many stores, too, as its not unusual to see their former locations either for rent and being used by someone else. They seemed to start their slide in quality around the time shortly after they entered Atlanta about 20 years ago--they went from being worth a special trip to not. The slide probably did reflect too rapid expansion. I wonder if Culvers will run into the same problems.
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Re: Steak and Shake closing 57 locations

Post by storewanderer »

buckguy wrote: January 11th, 2023, 5:31 am

I didn't know they had that many. This chain has been going downhill for years and is having trouble competing against Culver's and Freddy's who are expanding rapidly.
I was surprised they had that many stores, too, as its not unusual to see their former locations either for rent and being used by someone else. They seemed to start their slide in quality around the time shortly after they entered Atlanta about 20 years ago--they went from being worth a special trip to not. The slide probably did reflect too rapid expansion. I wonder if Culvers will run into the same problems.
[/quote]

I think this chain has a serious perception problem. 10-12 years ago they were pushing the menu of 24 items under $3.99 (never saw that menu in Reno) and they had a lot of lawsuits over it with franchisees as they were trying to force participation.

The problem was the 24 items under $3.99 were at most burgers with 1/4 lb of meat and a small (like McDonalds small paper bag) portion of the skinny fries. While this really was a solid value for the offer, the portion was on the small side and it did not exactly come off like a premium product (since it was cheaper than other fast food). Somehow the consumer seems to have an expectation of Steak N Shake being a premium product, but in my view based on my initial visit to one (probably around 2009), it was not a premium product by any stretch- it was a cheap product and the operation felt cheap when you went in (servers in wrinkled white uniforms, disorganized, not real clean, the server interaction was the classic old order, get your food and the check is dropped on the table with the food and you never see the server again, etc.) and those locations in MO, TX, etc. that I went to at that time were all corporate operated. But when you are at a sit down restaurant and your ticket is $6 total (3.99+1.99 for drink- and that drink is half price during the happy hour mid day) what do you expect? I think that attitude translated into product quality too- it is cheap, take what you get sort of attitude.

Then they expanded into distant markets out west, no value menu, some CA ones no table service, and at that point there is so much fast food burger competition already what really differentiates them? Some locations opened and closed very quickly- the NorCal locations in Daly City and Campbell were not even open one year. Some in SoCal survived longer; two are still open in SoCal; Victorville (which appears to have opened and closed multiple times) and Yucca Valley. They seem to have tried to open a location in Santa Monica and a location in Burbank that were located in a downtown sort of area more like you'd expect to see a Shake Shack and did not survive.

Now they have this new format that is fast food format and a very small menu. The locations do not seem to be recovering inside sales under this new format. Some franchise operators seem to be continuing the old format with table service and breakfast. I would be curious how long it will take the corporate to see the franchise operators still running the old table service/breakfast format are doing unit volumes multiple times higher than the corporate units or franchisees that have converted to the fast food format. The corporate seems to insist the table service and breakfast were money losing propositions. I don't know. Units seem to be closing at a more rapid clip since these changes...

I am very hopeful the remaining Reno location will survive and be operated properly going forward. The location that closed was clearly not being operated properly.
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Re: Steak and Shake closing 57 locations

Post by jamcool »

Culver’s has a pretty tight reign on their franchisers, especially how many stores they can operate.
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