By J.K. Wall
The Indianapolis Star

INDIANAPOLIS - For a throwback diner chain whose ads once proclaimed itself "same" and "unimproved," Steak n Shake has gone through a whirlwind of changes in the past year.

Since president and chief operating officer Peter Dunn came on in September 2002, the Indianapolis company has conducted extensive consumer research, rolled out three new milkshake flavors, experimented with new salads and non-burger menu items, used mystery diners to measure and improve service, increased spending for advertising and, for the first time, accepted credit cards.

So far, so good.

Sales at Steak n Shake stores open for at least a year rose 12.4 percent in the fourth quarter, driving up profits 17 percent, not counting a one-time charge to close nine restaurants.

"Management has laid out a game plan, they've executed on that game plan, and we look for continued growth," said Dean Haskell, senior analyst at JMP Securities in San Francisco.

The driving force behind the changes is Dunn, a Harvard Business School graduate who made his career in consumer food products. Dunn, the final piece in an effort by chief executive Alan Gilman to fill out the company's management team, has pulled Steak n Shake's stock out of the doldrums.

"Peter has brought a breath of fresh air into the company," Haskell said. Dunn, 48, had been president of Borden Foods Corp., where he helped revitalize the Cracker Jack brand. He also led the launch of Lunchables in his stint at Kraft General Foods.

Steak n Shake also shifted the focus of its advertising to support the new products. In the past, Steak n Shake's television ads contrasted the restaurant chain with fast-food joints, touting its china plates, table service and made-to-order meals.

That shift in emphasis plays better in new markets, said Greene, where knowledge of Steak n Shake isn't as widespread as in Indianapolis and St. Louis.

The number of Steak n Shake stores has grown slowly under Dunn, continuing a recent trend. The chain nearly tripled in size in the 1990s and now has 413 stores.