Outlook appears grim for Steak ‘n Shake restaurant chain

Steak 'n Shake

If you enjoy Steak ‘n Shake or never have been to the restaurant chain founded 85 years ago along Route 66, you may ought to visit one soon.

It may not be around in the next few years.

Indiana-based Steak ‘n Shake, founded in 1934 by Gus Belt along U.S. 66 in Normal, Illinois, contains about 600 locations, mostly in the Midwest. Its steakburgers, milkshakes and chili mac supremes remained a favorite for quite a few folks of a certain age range, especially the late, great movie critic Roger Ebert.

But this well-reported article by Greg Andrews of the Indianapolis Business Journal explains in grim detail why the Steak ‘n Shake chain may not survive into its ninth decade.

The whole article is worth reading, but here are the highlights:

  • The chain’s first quarter suffered an $18.9 million operating loss — way more than the $10.7 million loss for all of 2018.
  • Customer traffic counts fell 13 percent over the last three years and 7.7 percent in the first quarter alone.
  • Steak n Shake must pay off a $184 million loan by March 2021. Lenders reportedly hired legal counsel over concerns about the non-guaranteed debt.
  • CEO Sardar Biglari, whom many blame for the chain’s problems, insists new milkshake machines will spur its turnaround.
  • The chain’s board of directors is described as a rubber-stamp group with no inclination to oust its CEO.
  • Biglari insists on keeping prices of its menu items low, thus squeezing each restaurant’s margins.
  • Customer service at the restaurants seems to have suffered amid the profit squeezes.

What the demise of the chain may mean for historic Steak ‘n Shake along Route 66 in Springfield, Missouri, remains uncertain.

Its owner, Gary Leonard, resisted efforts to change the look of the restaurant at 1158 E. St. Louis St. since it was built in 1962. As a result, it was listed on the National Register of Historic Places in 2012.

The original features that made it unique:

– The main building, with a poured concrete floor, porcelain exterior wall panels and plate glass windows on glazed tile footings.

– The rooftop and street-side neon signs, and the painted wooden sign overlooking the parking lot’s southern end.

– The curb service window and counter.

– The kitchen cook line, stainless steel kitchen counters and tile kitchen floor.

– The original wood door on the rear entrance.

Perhaps the Springfield Steak ‘n Shake will be a lone survivor, much like Gene Waylan’s KuKu along Route 66 in Miami, Oklahoma, remains the last man standing from a chain that numbered 200 restaurants in the 1950s and ’60s. I really don’t know. But if you have to eat at one Steak ‘n Shake, the one in Springfield is the place to go.

Alas, Gus Belt’s original Steak ‘n Shake in Illinois was razed nearly 20 ago and replaced with a pizza parlor.

UPDATE 5/22/2019: Gary Leonard, owner of the Steak ‘n Shakes in Springfield, Missouri, chimed in with a comment below. In short, he states the restaurants are independently franchised by him, and “will be open for a long time into the future.”

(Hat tip to Pat Bremer; image of the historic Steak ‘n’ Shake restaurant along Route 66 in Springfield, Missouri, by George Thomas via Flickr)

16 thoughts on “Outlook appears grim for Steak ‘n Shake restaurant chain

  1. Oh man, this is such bad news. I love this chain. Mom and Dad did too. Girls I dated did, wife does, always stopped at one when we were traveling with the kids…I sure hope someone wakes up in time to save this chain.

  2. We eat a Steak and Shake often and would really miss it. Their service has deteriorated lately especially lack of a greeter and seating promptly when arriving and waiting to check out after a meal. Here’s hoping they survive.

  3. While there are a number of Steak ‘n Shake menu items I really like, customer service has really deteriorated. The drive-up wait time is especially annoying. I ordered chili Mac recently. No napkins, no plastic, no crackers in the bag. Worse, the chili Mac and noodles were ice cold. This is pretty routine stuff to keep a customer happy. Their 4-4-4 promotion is terrific, but how will it matter if service doesn’t improve. Finally, on another trip I discovered the drive-up was closed. Seems the help didn’t show up!

  4. We have a new Steak and Shake here in Smyrna, TN. We were excited when it was being built, though it looked small. The week it opened we went in for lunch. The place was packed, but it was full of people waiting for their orders. I noticed people in line and asked where the waiters and waitresses were. “Oh, we don’t have them. You order at the counter and then sit down to eat.” What? I thought? But I was in line and hungry, so I worked my way to the front to give my order. The girl at the register took it and said, “We’re running behind. It will be about a half hour.” I looked around and there was no place to sit and wait. Since I hadn’t paid yet I told her, “Cancel my order. If I want to eat at a fast food restaurant, I’ll go to McDonalds.” We left and have not returned. Nor will we.
    As a soccer coach at a rural school we would occasionally play games near Springfield, MO. Once a year we would take a little extra time to eat at Steak and Shake, instead of a fast-food restaurant before heading home. This was a learning experience for the boys who often had limited experience in sit down establishments. Ordering off of menus and figuring tips was something special that wasn’t common for some. Alas, if Steak and Shake is no more than another burger barn, kids will miss those learning moments.

  5. It takes about 10 min to get a side order of beans and nothing else at the Urbana, IL location when nobody is in line in front of me. Going in to get it as a carry-out slows things down even more. There is a total lack of management oversight. It’s like a what-if thought experiment playing out right in front of me: what if a bunch of high school kids ran a restaurant. I love Steak & Shake, but I hate the restaurants…Springfield, MO excepted. Here is some footage of the Springfield restaurant in 2010:

    start at 2:23:55

  6. I’m originally from STL. S & S has been a fav for me since the 60’s even though their menu is more pricey. 2-years ago, I stopped eating there because their fries taste horrible. Are they not changing the frying oil or are they using GMO potatoes?

  7. I’ve ate at the one in Carbondale Illinois location and the service really went downhill since hiring non qualified waitresses and staff. The bathrooms were so filthy I wanted a shower afterwards. I’ve never been back since.

  8. In Bloomington, IN, two of our three Steak n Shake locations have closed. Signs on the doors claim that these are closed for revamping and franchise requirements but when they vacated, they removed all the signage. I suspect they’re gone forever. TripAdvisor for the Bloomington locations indicates long waits for tables, poor customer service and cold food. I’ve read the article in the Indianapolis Business Journal. Wow, this does not sound good at all !

  9. They’ve been closing here in STL left and right. 3 months ago I had well over 10 that I could get to in less than 15 minutes, now there’s maybe 4 still open.

  10. The Steak n Shake’s in Springfield, Missouri area are independently franchised By me, Gary Leonard and we are doing just fine and will be open for a long time in to the future. I’ve been knocking about these restaurants for 46 years and my family for 80. Come on by and we’ll take care of you. Gary

  11. We love eating at Steak and Shake. We are treated with respect and are usually served quickly. We don’t go at a time when we know they will be busy, busy, busy. Senior Citizens .

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.