Burger Chain Joins Competitors in Plans To Debut More Drive-Thrus
Burger chain Shake Shack plans to debut roughly 40 new restaurants in 2023, with up to 15 of them drive-thrus as the chain joins other restaurant companies accelerating the roll-out of that style of locations.
The growing New York-based company currently has 24 new company-operated restaurants under construction, CEO Randy Garutti said Thursday during a fourth-quarter earnings call. Those projects represent Shake Shack's expansion of its real estate footprint, which includes increasing its number of openings from last year. There are now 440 Shake Shacks globally.
In fiscal 2022, Shake Shack opened 36 new company-operated eateries, including nine drive-thrus, according to an investor presentation posted Thursday. In the fourth quarter alone, Shake Shack debuted 22 new locations, including five drive-thrus, "despite continued macro challenges," Garutti said in a letter to investors.
In total, the company now has 12 drive-thrus open in the South, Midwest and Colorado. So this year's plans for 10 to 15 drive-thrus will double the number that Shake Shack has, according to the CEO.
Shake Shack is one of a number of restaurant chains that are de-emphasizing dining rooms, in some cases, to cater to patrons and make it easier to pick up food ordered online or with mobile apps — consumer behaviors that accelerated during the peak of the pandemic when dining rooms were closed or people just wanted to avoid them.
In just one recent example for Shake Shack, it's planning a 3,510-square-foot restaurant with a drive-thru and an outdoor patio in San Diego. It has been experimenting with different formats for the drive-thus, and competitors such as Chipotle Mexican Grill and Applebee’s are also among those expanding and expanding such services.
In the first quarter, Shake Shack expects to debut six new locations, with roughly 40 planned for the full fiscal year, according to the company. Shake Shack just opened a new drive-thru in Dublin, Ohio, and a regular or so-called "core" restaurant in the Bedford Stuyvesant section of Brooklyn, New York, Garutti said.
As for the drive-thrus, he told analysts, "We know there is still much we have to learn and much to prove out as we've been rolling out a few different designs as well as kitchen flows so that we can optimize this investment for learning quickly and evolving the model for the long run."
For the quarter ending Dec. 28, Shake Shack reported that its total revenue was $238.5 million, up 17.4% compared with the year-ago period. Same-store sales rose 5.1% versus the prior year.