Shopping Centers Today

MAY 2012

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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RET AILING TODA Y courts, and 2,000 to 2,500 square feet for in-line units — and its simplified menu are ideal for shopping centers, ac- cording to Jim Flaniken, the company's senior vice president of marketing. The company also introduced the Signature Steakburger, made from organic beef: a first for any national chain, Flaniken says. To judge by the Times Square lunchtime crowd waiting to order from staff clad in red uniforms that evoke a NASCAR pit crew, the concept is a suc- cess. The line snaked out the door. Steak 'n Shake's expansion drive fol- lows on the strength of 12 consecutive quarters of same-store sales growth. For 2010 the company posted a year-on-year same-store sales increase of 7.5 percent on revenues of nearly $700 million and average per unit volume of nearly $1.6 million. The company declines to share 2011 data, but Chicago-based food in- dustry consulting firm Technomic esti- The company's first (and thus far its only) unit in a mall food court opened in December at Simon Property Group's Barton Creek Square, in Austin, Texas. mates that Steak 'n Shake posted some $800 million in sales last year. "Opening in Times Square is a state- ment," said Darren Tristano, Technom- ic's executive vice president. "They're going to be up against chains like Shake Shack, The Counter and Five Guys." Shake Shack, which just opened its first 74 SCT / MAY 2012 use for the center with a great burger- style menu." The Steak 'n Shake menu offers overseas unit, in the Mall of the Emir- ates, in Dubai, is the creation of restau- rateur Danny Meyer, who cites Steak 'n Shake as the inspiration for his own popular burger chain. Steak 'n Shake is similarly the inspi- ration for several other successful names in the burger market, Ozersky says: Blue 9, Five Guys, Schnipper's Qual- ity Kitchen and SmashBurger among them. "Every great hamburger you can name — they're all based on this smash- ing technique." Signature does preserve that smash- ing technique, but the concept is oth- erwise a departure for Steak 'n Shake, which has heretofore operated free- standing units measuring about 3,400 square feet and offering a dining room plus carryout and drive-through, usually built upon an acre. The company's first (and thus far its only) unit in a mall food court opened in December at Simon Prop- erty Group's Barton Creek Square, in Austin, Texas. "Steak 'n Shake has been a great addition to our successful food court," said Nancy Hedrick, the mall's manager. "As a national franchisee, they bring a strong concept and good not just burger fare, but also a range of breakfast, lunch and dinner items, most notably chili-topped spaghetti. Chicago Sun-Times film critic Roger Ebert, an avid fan of the chain, praised the pasta thus: "If the Pope were to ask where he could get a good plate of spaghetti in America, I would reply, 'Your Holiness, have you tried the Chili Mac or the Chili 3-Ways?' " Like all faithful Steak 'n Shake devotees, though, Ebert reserves his highest praise for the burger itself. "If I were on Death Row, my last meal would be from Steak 'n Shake," Ebert wrote in a now famous essay. "If I were to take President Obama and his family to dinner and the choice were up to me, it would be Steak 'n Shake — and they would be delighted." The chain liked the quote so much that it appears on the franchising page of its website. Steak 'n Shake operates nearly 500 restaurants across 22 states, but is con- centrated largely in the Midwest and the Southeast. The Signature shop is the chain's first foray into the fast-casual burger segment and also the farthest north it has gone along the East Coast. Ultimately, the chain wants to open about 1,000 franchised restaurants in the U.S. and abroad, according to the web- site. The company announced that it has franchise agreements in place already for 110 units over the next several years, and shopping centers will play an important role in the company's expansion, Flan- iken says. "Shopping centers will be the primary real estate for opening up Steak 'n Shake Signature restaurants," he said. Tristano thinks this could be a win- ning strategy. "They're trying to reen- ergize the brand and increase aware- ness with consumers," Tristano said. "Shopping centers may likely do the trick for them." SCT

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