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Created in the Twin-Cities, Steak ‘n Shake’s fate hinges on self-service kiosks

Steak n' Shake on Big Hollow/Peoria Co. Property Tax Records

(WEEK) - An iconic restaurant chain that started in Normal 87 years ago is shaking up the way customers are served, aiming to stay afloat after the pandemic.

Steak 'n Shake, known for steakburgers and milkshakes, will emerge from the health crisis with a much different service model with customers ordering food themselves using kiosks instead of servers taking their orders in the dining room.

"The combination of labor-intensive, slow production and high-cost table service was a faulty business model. Simply put, the operation of dining rooms with table service was a money loser," said Sardar Biglari, chief executive officer for Steak 'n Shake's parent company, Biglari Holdings.

In his annual message to shareholders, Biglari said labor costs had been running at 38.5% of net sales before the pandemic, putting the chain at a 6 to 8 point competitive disadvantage to its competitors.

"The modernization centers on achieving simplicity and speed in the way Steak 'n Shake’s products are made and the way they are delivered to guests — without a diminution of quality," said Biglari.

"Although most of our dining rooms are currently closed, we are not dispensing with them altogether; rather, we intend to equip units with advanced self-service," he added.

It will cost $100,000 to $200,000 to modernize each of the restaurants.

Biglari bought the company in 2008.

Steak 'n Shake has 556 restaurants nationwide. Founder Gus Belt opened the first restaurant in 1934 on South Main Street in Normal, now the site of Monical's Pizza near Carle BroMenn Medical Center.

Howard Packowitz

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