INDIANAPOLIS The beleaguered Steak n Shake family-dining chain is experimenting with a number of bargain offers that resemble the deals many quick-service chains are using as traffic draws, including snack wraps, a milk shake happy hour and new breakfast items.
The 502-unit chain disclosed plans for those value-oriented initiatives after wielding several other lures that are widely used in quick service, including two double cheeseburgers for a bargain price of $2.40. In February, Steak n Shake attempted to draw budget-conscious consumers with the signature quick-service offer of a bundled meal: a double cheeseburger with French fries for $2.99. Acting president Jeffrey A. Blade cited the limited-time offer as a bright spot in a second quarter that left him and other executives “dissatisfied.”
On the drawing board is another apparent nod to a strong seller in fast food, the oversized burger. Steak n Shake said the chain would conduct a test this summer in which its Triple Steakburger is rechristened the 1934 Burger. The sandwich will feature one-third of a pound of ground beef.
The promotions, Blade said, are intended to build on Steak n Shake’s “core equities” of Steakburgers -- the chain’s brand name for hamburgers -- and milk shakes. Toward that end, he indicated, Steak n Shake’s snack wrap will be made with Steakburger meat. He described it as “something unique compared to competitive wrap offerings, which are all chicken-based.” The test marketing will begin next month, he said.
Already in test is the offer of a milk shake for $1.99 between 2 p.m. and 5 p.m., or what the chain termed a milk shake happy hour. A similar deal delivered a sharp climb in afternoon traffic for Sonic Drive Ins, parent Sonic Inc. recently revealed. But it acknowledged at the time that patrons tended to stop for one of the discounted drinks instead of visiting for lunch or dinner.
Steak n Shake also disclosed plans to offer a 99-cent milk shake for children on weekends, “where sales have been most challenging,” Blade said.
The chain divulged its marketing plan during a conference call last week between analysts and the brand’s parent company, The Steak n Shake Co. A transcript was recently released by SeekingAlpha.com, an online clearing house of financial information.
During the call, management described Steak n Shake’s finance performance during the second quarter as “unacceptable.” Blade attributed the chain’s difficulties to a challenging economic environment.
He noted the chain’s efforts to boost breakfast sales, another tactic widely used by QSRs. The launch of a new morning menu led to a 25-percent increase in coffee sales and a 17-percent bump in breakfast sales overall, Blade said. But, he added, the benefits were “not enough to impact same-store sales declines in a meaningful way.”