Shake Shack's current recipe for success

Shake Shack is planning a record number of openings. The New York-based burger chain is an exception in the "fast-casual" food segment.

Oklahoma City opening. © SHAKE SHACK

The Illinois-based publication Restaurant Business reports on the promising outlook shared by Shake Shack’s CEO during an informal discussion at the Raymond James TMT Consumer Conference:

A secondary benefit: macroeconomic headwinds are making younger, middle-income consumers much more selective in their spending. Based on this situation, Rob Lynch expects a strong 2026.

Record number of openings: the chain is expected to have opened between 45 and 50 new restaurants by the end of the year, a record annual rate. This figure is projected to reach 60 by 2026. And Shake Shack even aims to quadruple its number of locations in the United States to reach 1,500 company-owned establishments.

Advertising investment: Marketing spending remains lower than that of many competitors, fluctuating between 2.5% and 2.7% of revenue. Shake Shack will invest in a highly targeted manner, with an emphasis on digital marketing (social media and connected TV, CTV) to reach consumers within an eight-kilometer (5-mile) radius.

Loyalty program: the reward system is under development and should eventually help attract more teens who, according to Lynch, "never want to spend money without earning points."

The "killer app": Shake Shack posted strong results in the third quarter thanks to promotions offered through its app. The retailer is investing in driving traffic through this channel, whose usage has increased by 50% but which represents less than 10% of its business. "This is where we offer the best value, and the long-term value of these users is much higher than that of casual tourists or infrequent customers," Lynch emphasized.

The fundamentals: Order preparation remains one of Shake Shack's biggest challenges. However, the chain has managed to reduce its service times by about a minute, explains Lynch. To achieve this, staff are now reinforced during peak hours, which improves speed of execution. Furthermore, the installation of ovens specifically dedicated to cooking bacon has freed up space on the griddles, thus increasing burger production capacity. "It's transformative for our business. Operations is about doing the basics right."

Growth: Shake Shack has faced challenges in terms of customer traffic in major urban markets, such as New York and Washington, while the brand has experienced explosive growth in the Sun Belt (particularly in Florida, Texas, and Arizona) and the Midwest. These are all prime locations for new openings.

Regarding the international park (235 licensed restaurants), Lynch presented the new formula: smaller formats for greater real estate flexibility for partners. But also new menu items, adapted to local tastes, such as the fish sandwich in Hong Kong.