Shake Shack Grubhub Delivery Conundrum

Consumers are dynamic not static according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  All successful restaurant operators will tell you the customer come first.  At Shake Shack someone missed that assignment or simply forgot rule number one the customer comes first.

When Shake Shack entered a new exclusive delivery partnership with Grubhub consumers did not like it, were unaware, and clearly disappointed that the delivery options they were using in the past had been removed from service.

While delivery Grubhub was available at nearly all 151 company operated Shake Shacks. Shake Shack CEO Randy Garutti stated that “customers are used to finding the brand on DoorDash, Caviar and Postmates.” The result was clear according to Garutti  “Average weekly sales for domestic company stores declined to $80,000, down from $86,000 for the same quarter last year.” How could this have happened?

Just to stay relevant our Grocerant Guru® stated it was a simple ‘Quid pro quo’. Shake Shack new deal with Grubhub deal was sealed by sharing of consumer data.  Thus, making the delivery relationship more about big data than the current customer base.  

Garutti has some simple justification for over-looking consumers stating “the company went with Grubhub for a variety of reasons. It is less complicated on stores to work with one delivery operator; the long-term economics tied to commission fees are projected to be better; and, most importantly, Grubhub has agreed to share customer data, which delivery companies often hold hostage.”

Garutti over looked the consumer and his sales fell.  That is the simple truth of it. Had he started with an exclusive agreement with on delivery company there would have not been a problem or consumer blow-back. Garutti was caught in within the consumers paradox of choice.  Brands need to empower consumers not confine them. 

Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit www.FoodserviceSolutions.us 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.