Shake Shack Stuck in the Middle

 

Restaurant brands continually strive to create a point of differentiation that consumers consider an attribute and a reason for them to come back.  Cravability with a differentiated point of food quality, service, or value drives widespread adoption according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Many chain restaurants have reduced the size of there menu to increase speed of service. The menus become bloated as marketers added new items to help avoid the ‘veto’ one person in a group not wanting beef, chicken, or insisting on vegan. That veto vote comes in play as consumers want fresh food fast and want to simply preorder, and pick up via a drive-thru on the way home.

Shake Shack announced that it is offering $225 million of convertible senior notes, due in 2028, to private investors. Why? Simple, avoid the veto vote by adding drive-thru’s to all units it can, and according to Johnson that makes sense. One problem that will mitigate their long standing fast casual mindset and place them messaging a drive-thru fast food messaging mode? Our question is will Shake Shack’s marketing team be willing to make that move? Will they simply continue fast casual messaging placing themselves ‘stuck-in-the-middle’ in the consumers mindset?

So, “Shake Shack expects to use the net proceeds from the offering to support its growth and development plans,” the company said in the filing. “Investments may include, but not be limited to, the opening of new Shacks, Shack format evolution, such as drive-thru, Shack Track, the digital guest experience and continued investment in talent. Other uses of proceeds include working capital and general corporate purposes.”

Shake Shack has previously said it plans to open a drive-thru, in Orlando, by the middle to latter half of the year. The New York City-based chain has also announced plans to operate five to eight drive-thru locations around the country by the end of 2022.

Marketing messaging is important when adding drive-thru’s, Shake Shack has added pickup windows, curbside capabilities, app-based delivery and more reinforcing the value of service. That are doing that for good reason as same-store sales were down 17.4% systemwide in Q4, with suburban units roughly flat and urban same-store sales declining 31%. Does your marketing messaging look more like yesterdays than tomorrow’s?

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.