Apparently, using beef tallow in your fries and marketing the hell out of it will get customers into your restaurant.
Biglari Holdings, the parent company of the burger chain Steak n Shake, said in a federal securities filing that its same-store sales rose 10.7% in the second quarter. The chain in February started cooking fries in beef tallow at its restaurants—though the fries are still par-baked in vegetable oil by its suppliers.
The company is not the only one to use beef tallow for frying, but Steak n Shake marketed the change heavily, generating apparently strong sales in the process.
It also gives the chain a nice boost following several years of sales and profitability declines, store closures, a near bankruptcy, a pandemic and massive changes to the company’s business model and franchising strategy.
Steak n Shake stopped reporting same-store sales during the pandemic, after that metric began falling in about 2017, and never started again. The company for years operated as a full-service family-dining chain that specialized in burgers.
Under Sardar Biglari, chairman of parent company Biglari Holdings, the company for years operated with a heavy discounting strategy. But service issues, quality concerns and competition hurt sales. Units began closing, and the chain flirted with bankruptcy in 2021 before a last-minute rescue from Biglari Holdings.
Since then, the company has converted many of its locations to a counter service model with kiosks. It also instituted a Chick-fil-A-like franchising program in which franchisees pay $10,000 for the right to operate a restaurant and then share the profits with the company.
The company has continued to close locations. Steak n Shake has closed 27 locations over the past year, according to securities filings. That includes eight of the franchise partner locations, most of which closed late last year, along with 20 traditional franchise locations, seven of which have closed in the first half of this year. Steak n Shake has 417 locations in all, down from about 600 before the pandemic.
Steak n Shake has embraced the Make America Healthy Again (MAHA) movement led by U.S. Health and Human Services Secretary Robert F. Kennedy, Jr., who made a public visit to one of the chain’s restaurants. It has received considerable attention in conservative media as a result.
The company in May also started accepting payments in Bitcoin, which Steak n Shake’s account on the social media platform X called a “game changer.” The company is also devoting more attention to social media marketing, particularly through its X account, which has been more active and generating considerably more impressions this year than it has historically received.
Still, the strong same-store sales in the second quarter came during an otherwise brutal time for restaurants. Much of the fast-food business has struggled to generate sales growth as low-income consumers have cut back on spending.
Biglari Holdings’ restaurant operations revenue increased 12% last quarter. Biglari Holdings’ total revenues increased 10.4% in the period. The company also turned a $50.9 million net profit, up from a $48.2 million loss, due largely to better profitability from the companies it operates, plus increases in gains from its investment partnerships.
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