Employees and fans alike are worried for the future of American fast food institution Steak ‘n Shake after reported unrest throughout the company over serious financial issues. According to an article published last week in The Indianapolis Business Journal, the chain reported staggering first quarter losses for 2019 of $18.9 million, following at loss of $10.7 million in 2018. Understandably, this situation is a cause for concern both inside and outside the business.
According to columnist Greg Andrews, the issue centres around CEO Sardar Biglari and his approach to revitalising the business. Andrew reports that investors have become "contemptuous of both Biglari and his doormat board" after the company’s AGM meeting last year, where Biglari described Steak ‘n Shake as “...a museum — not of art but of businesses," adding that, "Rather than collecting Monets, we collect money from productive assets." Despite the colourful rhetoric, the reality of the situation is significantly less stable.
A particular bone of contention is Biglari’s convoluted revival plan. Not only has Steak ‘n Shake just agreed to close 60 company-owned restaurants, with a plan supposedly in place to re-open them at an as yet unidentified point in the future as franchises, but Biglari appears, to some critics at least, to be more interested in changing the business’ approach to making classic menu items than fundamental and arguably essential structural change.
In particular, insiders are struggling to understand why Biglari is reportedly obsessed with getting rid of Steak ‘n Shake’s signature cherries on their milkshakes - a move that he suggests could save the company $1,000,000. However, according to the IBJ article, "Three different shareholders pointed out, in conversations, how ridiculous that sentiment is … Given all [the dubious expenses], shareholders were pointing out that maybe there is a better way to save $1 million rather than eliminating cherries from Steak ‘n Shake's milkshakes." This difference of opinion at the top of the business could ultimately spell trouble for everyone associated with Steak 'n Shake.
It is as yet unclear what the wider ramifications might be for Steak ‘n Shake’s loyal customers. Several have already taken to social media to voice their outrage at the idea that the cherry might soon vanish from their shakes, with one writing “Over my dead body” to general grumbles of agreement. Others have expressed their sadness that Steak ‘n Shake could be in trouble, with several Twitterers expressing their disbelief that their local branch has closed. Whether fundamentally altering the composition of their milkshakes is enough to turn the tide remains to be seen. But, with losses in the tens of millions and tension in the boardroom, Steak ‘n Shake’s future is far from certain.