Why Shake Shack Is Borrowing Ideas from Fast Food Restaurants | WSJ The Economics Of
Shake Shack built a $4 billion business as an alternative to fast food, with gourmet cachet and lofty prices. But as the fast casual restaurant expands, it’s embracing a tested fast food strategy: drive thru, and hoping it won’t get in the way of its premium branding.
WSJ explains how the burger chain is trying to speed up operations and expand, while keeping a more premium image than fast food chains like Chick-fil-A, McDonald’s and Taco Bell.
Chapters:
0:00 Shake Shack expansion
0:43 History of long lines
1:10 Drive-thrus
3:52 International licensing
The Economics Of
How do the world's most successful companies generate revenue? In this explainer series, we'll dive into the surprising stories behind how businesses work--exploring everything from Costco's "treasure-hunt" model to the economics behind Amazon's AWS.
#ShakeShack #Food #WSJ
Пікірлер: 312
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@maureencora1
6 күн бұрын
Portillo's Hot Dogs & Italian Beefs.
the idea of infinite growth is what will always destroy a companies core principles.
@MangosInTrees
26 күн бұрын
🎯🎯🎯
@nameundefinedname5307
23 күн бұрын
this!
@Ruth-os4mi
20 күн бұрын
Infinite growth is the Achilles heel of capitalism.
@user-tg9io9xv2n
11 күн бұрын
@@Ruth-os4mi no it is not. the management of growth is the achilles heel of capitalist companies. there are plenty of companies who continue to grow for many decades while sticking to their core principles, it is part of the reason why investors such as warren buffet are rich and you are not. one day you commies will learn that stagnant growth will also mean stagnant wages, but I would have better luck convincing a brick wall.
@user-tg9io9xv2n
11 күн бұрын
no it is not. the management of growth is the achilles heel of capitalist companies. there are plenty of companies who continue to grow for many decades while sticking to their core principles. it is part of the reason why investors such as warren buffet are rich. one day communists will learn that stagnant growth will also mean stagnant wages and a lower standard of living, but I would have better luck convincing a brick wall.
In order to clearly not be fast food Shake Shack will become identical to fast food....how innovative.
@UHaulShorts
27 күн бұрын
Korexion: in orda 2 kompete wit McMarkups, shake shake will _emulate_ like dem
@backupdancer3720
27 күн бұрын
@UHaulShorts What language is this?
@UHaulShorts
27 күн бұрын
@@backupdancer3720 UHaulics
@redbean9410
27 күн бұрын
the food is still made to order and is truly fresh. thats what differentiates it from a mcdonald burger
@UHaulShorts
27 күн бұрын
@@redbean9410 Idle parkang is natt eko friendlay
I see this as the beginning of the end for this company. They always start off well, then when they make it big, they start to get greedy, and lose sight of their core values. Happens to so many companies.
@shiz278
22 күн бұрын
It's not about getting greedy. Inflation, increased rentals, increased staff salaries year-on-year mean companies have to adapt & try to reduce overheads & increase sales. It's not rocket science.
@jclive2860
19 күн бұрын
@@shiz278 yeah thats what you learn and thats what everyone tells you as well. Im not disagreeing with it, however you should also realize greedy billionaires and CEOs exist. Its almost all of them. Companies dont need to be trying to reach record profits each year by reducing quality for it. Employee benefits have drastically became the shadow in the last ten years. Companies dont really care all that much about employees nowadays.
@shiz278
18 күн бұрын
@@jclive2860 the greed argument is not rooted in fact in this case. Where is the evidence that they are being greedy? They're aiming for higher efficiency, a faster product turnover & more transactions. Everyone wants to make more money. If you're a multi-billion dollar brand like them, innovation isn't a choice, it's essential.
@f.j.c4444
8 күн бұрын
@jc It is always astounding when people criticize the founder and CEO of a company and label them as greedy. It is evident that they are being judged solely based on their wealth. Firstly, it is important to remember that without the founder or CEO, the company would not exist, and as a result, many people would not have jobs. Their lives revolve around their company, as they are constantly working 7 days a week and putting in 14+ hour days. Is their wealth solely derived from the company, or do they also have assets, investments, or other businesses?
@HiddenWen
7 күн бұрын
@@shiz278 All of this is true. Which often times produces a worse product for the consumer. You're thinking from their perspective, which is fine. I'm talking through the consumer's point of view.
The moment businesses decide to outsource lettuce cutting, is the moment they abdicate their premium differentiator. Freshness is inherently heavily comprised in pre-processed ingredients.
@lawrencefrost9063
27 күн бұрын
..I get your point but are you mad? The difference between LETTUCE and LETTUCE THAT WAS CUT is................. NOTHING
@proud2bnumber1
26 күн бұрын
@@lawrencefrost9063 Well, then the difference between Shake Shack and Mc Donald's is............... NOTHING
@CC-si3cr
24 күн бұрын
Newsflash. They have the worst lettuce! No cool, crisp, crunch. It usually has a wilted cooked spinach consistency by the time I get my hot, fresh off the grill burger. Lettuce prep ain't your issue people.
@bill-or-somthingbill4390
24 күн бұрын
I don’t want cheese, I want “precessed cheese product”, I don’t want a fresh burger, I want a patty formed in Utah and shipped frozen to California. I want my Taco Bell beef to contain only 70% beef. I want to pay $10 for anything at a fast food establishment. -literally no one, with access to actual food.
The beginning of the decline of Shake Shack. They are taking an idea that has worked in the past, and they’re applying efficiency to squeeze a little bit more profit and growth. Eventually, they’ll keep chipping away at what made this business great. The good news is that this helps local mom and pop shops because people can rely on that slow quality food from those local restaurants.
You can already see the quality going down. The CFO just said we will not wash and cut Lettuce. We will use pre-cut Lettuce. Okay, so what else are you going to cut corner on for saving time next?
@actionforanimals4862
27 күн бұрын
I think pre-cut lettuce is inconsequential.
@investingwithshakib
27 күн бұрын
They got a Goldman Sachs investment banker as the CFO of a burger joint and told them to increase revenue and profits. What can you expect lol
@FUZASHIII
27 күн бұрын
Oh no 😱pre cut lettuce ??? how dare they 😤
@vonoxid
27 күн бұрын
@@FUZASHIII Haha funny 😄 But Even though pre-cut lettuce is packaged in nitrogen, cell structure, color vibrance and taste complexity will fade, significantly inferior to fresh lettuce.
@redbean9410
27 күн бұрын
pre cut lettuce is still washed and cut. has no difference than cutting in house
Expensive AF. No meals, all single order menu items. No flexibility
@fabiors10
27 күн бұрын
And it's not even that good. I'd rather go to in n out or whataburger when I'm not feeling like making my own burger.
@richtran
27 күн бұрын
buddy just make more money and stop complaining.
@Shiitalker
26 күн бұрын
@@fabiors10not whataburger like a knock off BK
@MrGoalie2012
26 күн бұрын
@@fabiors10 whataburger or In-n-Out ANY day
@blueprint7
16 күн бұрын
@@fabiors10 in n out simp
So their strategy is to become a fast food chain? 🤣🤣🤣
@bill-or-somthingbill4390
24 күн бұрын
They are on the decline of the bell curve
Shake Shack is so overrated and publications like this just feed their hype even more
@daintyminnie9270
27 күн бұрын
Its NOT overrated. Its the best food that is healthy and quality.
anti fast food with anti fast food prices but the food couldnt taste more like fast food. the quality of shake shack burgers and fries is barely above mcdonald's but they charge u nearly twice the price of mcdonalds and 30 percent more than five guys, whose burgers are actually as close to real beef as u can get in any restaurant burger chain.
@PCDisciple
27 күн бұрын
Idk where you live, but unless you have a world class McD’s around you that is straight up cap
@rackt09
27 күн бұрын
Shake shack's burgers definitely taste better.
@jont2576
27 күн бұрын
@@PCDisciple i dunno,im from singapore, and if that is true what u are experiencing is different, the quality control must be lacking some.....im not saying the burgers are bad or sloppy but its just the most mundane ordinary mediocre burgers iv ever seen,it seems almost like play food that kids make in their ez bake ovens or something.... i remember the first time trying the wendy's baconator when it arrived in singapore like back in 2018 or something and my god that was an experience and those burgers only cost like 4 or 5 bucks..... shake shack is a sad joke, even their fries look like frozen crinkle cuts back in the 2000s that u threw into the microwave for 10 minutes or something..... i would post pictures, but i dont have instagram and i cant be bothered. come to singapore shake shack if u have 20 bucks u dont mind throwing for a lousy burger and a tiny tray of crinkle cut and a 10 oz lemonade tea.....
@PCDisciple
27 күн бұрын
@@jont2576 that’s my bad then for being US-centric. I’ve had McD’s all over the world and almost nowhere is as bad as US’s. Some of my favorite chicken sandwiches are from KFC lol. I can tell you however that in the U.S., Shake Shack is not at all a ripoff considering the quality you’re getting versus what you normally can get.
Quality takes time!! 😮
I went to Shake Shack for the first time a few days ago. The food was mediocre at best, overpriced, and the portion sizes were small. The only reason I went to Shake Shack was to take advantage of the $10 a month credit from my AMEX Gold card, but even with the discount, I didn't feel it was worth it. I may try The Cheesecake Factory next month to use my credit.
@chrismayher617
27 күн бұрын
I always use the credit for Cheesecake Factory.Do yourself a favor and try the lettuce wraps 🤤
@AshmewStudios
26 күн бұрын
Shake Shack is decent quality. It's cheaper than Five Guys for honestly better quality tbh
@IsaacHozz
26 күн бұрын
@@AshmewStudios I'd have to disagree. Five Guys burgers are as close to an actual restaurant beef burger as you can get and the fries are fantastic. And you get plenty. Shake Shack is barely better than Burger King -- and at least by me in Chicago Shake Shack is far and away more expensive than Five Guys.
@chrismayher617
25 күн бұрын
@@cr77702 I went with the gold card just for the 4% grocery and restaurant.I eat out everyday so it’s worth it in that way.The way the credits work though is bullshit.I wouldn’t have the card at all if Chase had a monthly grocery category and the points system for Amex is weaker than it is Chase but damnit they’re customer service is really the best
@MilkBoy17520
3 күн бұрын
@@chrismayher617 This is suburb coded so hard
Shake shack is expensive af and doesn’t taste the best.
I love your work, WSJ!
SS can do a drive thru but they need to build in a lot of waiting carrols for cars who have already placed their orders so they can keep the line moving. Would also help to have a long drive between order kiosk and pay kiosk.
shake shack is awful, so expensive, long wait times, worse with uber eats drivers waiting as well
@lvbadboy
27 күн бұрын
It’s always cold with Uber eats too
There's a Shake Shake in Atlanta off the Eastside Beltline, and it was a tasty treat that you could walk to without needing a car.
Am getting accustomed to Ms. Heather Haddon's delivery. Her deadpan delivery is amazing.
@matthewbermudez5105
12 күн бұрын
I’m not sure you hear women when they speak if you hear her inflections as deadpan…
I always laugh when i see people in the drive thru waiting while i go inside and get my order and there still out there waiting in there car ......How lazy can you possibly get
@lawrencefrost9063
27 күн бұрын
I always laugh when I see people in the comments misspelling their words...how bad at spelling can you possibly get? drive-thru* through* they're* their* the letter i should be capitalized I A comma after "order" for better readability. A question mark at the end of the second sentence is missing.
@seanjackson6305
27 күн бұрын
I always order in each fast food restaurant's app now. I go inside, pick up my order off the shelf, and leave all within 30 seconds.
@primius562
27 күн бұрын
@@lawrencefrost9063Grammar Nazi.
@adamv6917
26 күн бұрын
drive-thru is an acceptable spelling of drive-through
I love Heather Haddon's low energy in these WSJ videos.
shake shake is expensive asf and i never get an order under 15 mins whether or not the location is busy. you can expect to pay $17 for a drink fry and large lemonade
Yes! Choice at Menu Order Time.
I’ve quit all the really cheap-quality fast foods for over a year now: McDs, BK, Taco Bell, Wendy’s etc. I now only get 5 Guys or Chipotle on long road trips. Only had Shake Shack 3 times because there aren’t any nearby. Never had In N Out before but would love to try that someday, too.
They start to prepare your order the minute you order it, because 100% of people not 99% will pay for their food. So why to delay the order until you swap your card? excellent approach to save time both in the kitchen and for hungry folks.
I actually saw shake shack opening up a location in my city Didn’t know who they are until seeing this
In n out 🔥🔥🤪
The most hit or miss fast food restaurant there ever was. Food is not consistent across all locations and I've been to ones in New York, California and Dubai. I'll take my chances on In-N-Out.
I ate at Shake Shack one time. That was enough for me. I will stick with the quality leader… In-N-out…
I love shake shack and hope that they keep doing well. Would love to see expansion into Europe like Germany or the Netherlands at some point as well!
@t4squared
20 күн бұрын
Y’all don’t have enough American fast food over there?
They are the number one burger chain in Atlanta Georgia we love them
Job well done!!!!👍
I enjoy Shake Shack. It's more pricy than other chain restaurants but it's not like I eat it every week. When I do have it once in a while, it is really good.
Was there 2 weeks ago during juror duty. It's now $16 for a basic burger and fries without cheese. Used to be 11 to 12 which was already pushing it. Still super salty. No thanks, I rather make my own burgers.
Is this gonna be another video that can be answered in one minute?
After tryin most if food burgers chain, shake shack is the best
Shake shake costing 17 bucks for a buger and cheese fries is ridiculous. No wonder the stock is plumeting
If you go to a Burger King drive thru in the UK its a 15m wait minimum. If there are 3 cars in front of you make it a 30m wait.
I love shake shack. Good burgers
kiosks means customers do the work cashiers used to...wonderful.
🌮 Minneapolis has a four-lane Taco Bell drive-thru? Gotta see that! 😎✌️
@Lemonsstored
27 күн бұрын
Sonic
Interesting to see innovation
Omg I ❤ Shake Shack
Suggestion: Ask the cooks in the back on what changes the company is making and how effective those changes are to the quality of the food. They will know more than the executives.
Another over rated burger joint owned by the same people at top.
i have someone establishing my idenditybin new york but thr owrwon that did it is here in texas and learned everything about me
Inn n out on top
Shake shack just needs to have entertainment while the customers wait in the drive thru lines. Place a large screen and have a camera shooting the patrons, and have random coupons being sent out via an app. Use the camera paired with some custom software to make funny things out of the customers car, and give coupons out. That is whats wrong with modern take out, people are in their cars with nothing too do or watch. If you entertain the customers, and give them a chance to win free food, they WILL come back.
Greatttt
Shake Shack's drive-thru pivot is smart for these times! 👍
The first time I had Shake Shack was in 2019, and it was really good. I’ve had it twice since then, and it seemed the quality had declined a little bit.
Only In-N-Out has been able to serve quality burgers in a fast food environment without making you pay $20 for a burger and fries. Just go to in n out. They have it all figured out with what shake shack is trying to do and it still tastes better
Tldr: The enshittification of Shake Shack is well under way, big time.
Shake shack especially at airports extra slow. Registers not staffed, long line, I never stop there
One in Louisville, KY please!
Then will they have to increase the workers’ wage to $20/hr in CA, it they are becoming a fast food joint?
As one of these clowns who waited in line at the park its saddens me they have gone this expansive route, aka- the modern day McDonald’s playbook. The meat still taste the same, although I doubt Pat LaFrieda can supply them with the high quality beef going forward. It’s definitely not a chain for everyone, but to loyalists they could do a much better job with rewarding us, as we are the ones who don’t care about wait times. There’s no need to grab the InNout, 5 Guys, etc customers, they should concentrate on keeping us coming back, the price and wait times are insignificant.
How can you borrow from what you are? Anyone who ever thought Shake Shack was anything more than fast food got sold a tale.
Food isn't better than other food stalls in my country. Licensing and Operating cost is what limiting other competition from happening. Making antibiotic free meats as a law will make Shake Shack decrease is revenue and increase competition through out America.
To sell as much as possible to feed greedy rich investors.
@ws1814
27 күн бұрын
I’m sorry is Shake Shack running a soup kitchen feeding the needy?
I love shake shack ❤
Waited 8 minutes for my custom order in McDonald's... Nothing fast food. But, this does look better stuff. Come to the UK.
@nabidisla.5086
27 күн бұрын
They are in the Uk...
everything starts hip....then it becomes capitalism.
@UHaulShorts
27 күн бұрын
*korporate*
Shake shack made my stomach hurt the last time I ate there. Haven’t gone back since🤷🏾♀️
its going to turn into any other fast food chain once they start pushing it more and more. it starts with precut lettuce and ends with premade burgers on a heating plate
If it tastes the same and is made to order why would it possibly be a bad thing?
the need to learn from saizeriya - Japanese italian restaurant
Its always been the slowest fast food. Price for the quality is worst than fast food
I am willing to pay a premium for high-quality food.
@Arcwol
27 күн бұрын
SS has left the chat.
It’s like they haven’t seen that McDonald’s movie
In n out is fast food buts it’s fresh and made to order
how are drive thru cycle customer faster than dine-in fast food? you see drivers idling for hundreds of meters waiting just to place an order at a screen...
The premise of this video is immediately funny to me. Shake Shack, do yourself a favor and forget trying to get food out to customers in record time. Just get the food out made with quality and consumers will be happy and keep coming back.
Papa John’s and arbys are not who I would be looking to for top tier talent.
2 Cheese burgers, 2 fries, 2 shakes = $43 in Chicagoland. And it took forever and it wasn't even as good as Culver's which is 1/2 the price (or more.) Highway robbery.
I’ll take one.
Compromising on the quality of fresh ingredients like lettuce, to handle a fast food drive thru model, is terrible. But watching this video, they’d want you to believe this is a good path to fall down.
"we are not fast food" proceeds to be fast food.
All the comments here are so tone deaf. Shake Shack is a great product & they are aiming to make their processes more efficient, in order to generate higher sales. It's normal for any business to want to do that.
Will be seeing how the Toronto locale goes down, hate to state, made to order does not mean the quality is better.....so if the prices in Toronto with huge wait times, it will FAIL....!!!!!
By YouSum Live 00:00 :39 The Economics of Shake Shack 00:01 :24 Drive-thrus enhance profitability 00:03 :03 Efficiency vs. premium quality balance 00:05 :12 Data-driven operations for optimal inventory 00:05 :41 Ambitious expansion led by experienced CEO By YouSum Live
it looks so tasty yummy
hope they dont expand too much like starbucks. theres already like maybe ten locations here in the tokyo area...
The irony of saying you're not fast food then doing everything to slowly make yourself fast food. Like fresh lettuce probably tasted good but you gave it up for speed. 10 years from now when your burgers taste like burger King and it's all the brand name this will be spoiled milk
Why can customers order and pay via an app instead of interacting with the staff there, which has been adopted in other countrie? That's even faster and more cost-effective.
Probably the best model for Shake Shack is just to return to the Drive-In.
The sodas are unreasonably expensive
@neanam
27 күн бұрын
Don't order one then.
This is a glorified advertisement campaign. Want a great burger? Make it yourself!
Maybe Shake Shack should borrow the idea of making their food cheap. You know, like how fast food used to be?
2024 Do Chicago's Portillo's Hot Dogs & Italian Beefs with 87 Locations in the Midwest, California, Arizona, Florida & TEXAS.
in n out
Shake shack. Is. A. Fast. Food. Restaurant.👏👏
Drive throo *NATT eco friendlay* , 2 avoid minimum wage strikes, Y natt *app ordaz onlay?*
Good burger, extremely overvalued with poor value, if they’re able to create some value for the customer then they want to learn from in n out. Great value, fresh and consistent and about 1/3 of the cost (there’s a reason why they always have long lines)
I don’t think theres anything inherently wrong with fast food. The speed and how efficient they are at preparing food are actually pros. The problem is when people don’t know how to control how much they eat and also eat from fast food places everyday.
unless its a ptc, it should be fine. Its trendy, and ppl will wait. Theory versus Reality.
Expensive
I'm a burger lover myself and shake shack is overhyped unfortunately, but to each his own.
I’ve only eaten there once, one of worst experiences and meals (in milk valley CA)and too expensive for the lousy burger and fries, shocking to me anyone revisits
Tried it a few times. It was ok, but nothing special. There are many actual restaurants with good burgers at the same price. All the fast food places have gone downhill over the past 5 years or so