Shake Shack

Shake Shack Inc.
Public company
Traded as NYSE: SHAK
S&P 600 Component
Industry Restaurants
Genre Fast casual
Founded July 2004 (2004-07)
New York City, New York, U.S.
Founder Danny Meyer
Headquarters New York City, New York, United States
Number of locations
 136
Area served
 North America, Europe, Middle East, Oceania, Asia
Key people
  • Randy Garutti, CEO
Products
Hamburgers • Hot dogs • French fries • Milkshakes • Custards • Beer • Wine
Website shakeshack.com

Shake Shack (NYSE: SHAK) is an American fast casual restaurant chain based in New York City. It started out as a food cart inside Madison Square Park in 2004, and its popularity steadily grew. It eventually moved to a stand within the park, expanding its menu from New York-style hotdogs to one with hamburgers, hotdogs, fries and its namesake milkshakes. The company claims to use all-natural 100% Angus beef only[1] and says that its meat has no hormones nor antibiotics.[2]

Since its founding it has been one of the fastest-growing food chains eventually becoming a public company filing for an initial public offering of stock in late 2014. The offering priced on January 29, 2015; the initial price of its shares was at $21 immediately rising by 123% to $47 on their first day of trading.[3][4][5][6]

History

The original Shake Shack located in Madison Square Park

In 2000, New York City began the rebuilding of Madison Square Park, which had fallen into a state of disrepair and misuse. As part of the redevelopment, restaurateur Danny Meyer helped spearhead the creation of the Madison Square Park Conservancy to help redevelop it. One of the first things the Conservancy did in its goal to improve the park was to host an art exhibit called "I <3 Taxi" inside of the park to raise awareness of the renewal effort.[7] Meyer's Director of operations, Randy Garutti, established a hot dog cart which was run out of the kitchen of Eleven Madison, one of Meyer's Union Square Hospitality Group (USHG) operations. Over time the cart became extremely successful, and remained in operation for nearly three years.[8]

In 2004, the city began taking bids to operate a new kiosk-style restaurant within the park; Meyer outlined his idea for the space, and opened the first Shake Shack in July 2004. From its beginning the restaurant was not designed to be a chain, intended to be a single shop location designed specifically for New York City. However, as the original location's sales continued to grow, the group realized that there was a market for expansion.[8]

Since its opening, Shake Shack has grown to be the largest part of the USHG's portfolio. Its average store revenue of US$4 million is more than twice that of McDonald's average store revenue within the United States.[9] Its popularity is such that in the summer at its original location, the wait in line for service can stretch to over an hour, especially on weekends when the weather is pleasant. A webcam on the restaurant's web page shows the current line in real time.[9][10]

In June 2010, Shake Shack opened its first restaurant outside of New York City at the Lincoln Road Mall in Miami Beach's South Beach neighborhood.[11][12][13] In April 2017 the location completed a month-long renovation that added 586 square feet of space, bringing its seating capacity to 106.[14]

On July 12, 2010, Shake Shack restaurants were opened in the Theater District[15] and the Upper East Side.[16][17] The Upper East Side location's opening was significant because it "lifted" East 86th Street, an urban shopping district which had fallen on hard times; the location had been vacant, and even when occupied it was described by a neighbor as "never anything good there...dingy and dilapidated...almost an eyesore."[16]

In July 2011 it was announced that Shake Shack had reached a deal with the MTA to open a location in the lower level of Grand Central Terminal.[18] This project was delayed because the tenant occupying the space Shake Shack was to take over, Mexican eatery Zócalo, refused to vacate after the expiration of their lease and filed suit, arguing that the "bidding process (for retail space in Grand Central) is corrupted."[19] The suit was dismissed and Zócalo appealed. In October 2012 Zócalo filed for Chapter 11 bankruptcy protection.[20] In early May 2013, Zócalo vacated the space, and the new outlet opened for business on October 5, 2013.[21]

By August 2014, Shake Shack outlets had begun operating in California, Connecticut, Delaware, Washington, DC, Florida, Georgia, Chicago, Maryland, Massachusetts, New Jersey, Nevada, Pennsylvania and Texas.[22] That month, reports surfaced that the company was preparing to go public with an IPO and was discussing an underwriting with a number of investment banks, including J.P. Morgan, Morgan Stanley and Goldman Sachs.[22][23]

On January 29, 2015 Shake Shack priced its IPO at $21 per share. On the morning of January 30, 2015 it began trading on the NYSE at $47 per share under the ticker symbol SHAK. In April 2015, shares hit prices of $72, and hit a high of about $90 in May 2015.[24] In its IPO filing, the company stated that it planned to expand its domestic footprint to 450 company-operated stores. While no end date was given for that expansion, the company indicated its intention to open at least 10 restaurants each fiscal year, though it later amended that target to 12 a year and then again later in 2016 to 14 stores a year, a goal that would result in a total of 450 stores in approximately 25 years.[25] Later that May, Shake Shack filed for a trademark for the term "chicken shack" leading to speculation that the company would serve chicken sandwiches.[26] The company temporarily introduced chicken sandwiches to its Brooklyn on July 7, 2015.[27] In January 2016, Shake Shack introduced chicken sandwiches across locations in the United States, having previously started serving them at all Brooklyn Shake Shack locations.[28]

On August 31, 2016, Shake Shack announced it would begin room service at the Chicago Athletic Association Hotel, the first hotel in America to offer in-room Shake Shack.[29]

In November 2016 the first Houston, Texas location opened inside the Galleria; by March 2017 another opened inside Minute Maid Park in Downtown Houston. By mid-December Delaware opened its very first in New Castle. In February 2017, the first Michigan location was opened in downtown Detroit.[30] On May 10 of that year, Shake Shack opened their first Kentucky location, located at The Summit at Fritz Farm in Lexington.[31] That June, the company announced a location would open in Charlotte, North Carolina in late 2017, becoming the first Shake Shack in the Carolinas.[32]

International

Shake Shack has outlets in a number of international cities including Seoul, Tokyo, London, Cardiff, Istanbul, Moscow, Muscat, Beirut, Dubai, Abu Dhabi, Doha, Kuwait City, Riyadh, Manama , Tehran and Jeddah.[22][33][34]

A "Shack Burger" and crinkle-cut French fries

Shake Shack's eponymous products are its milk shakes, which have been reviewed as some of the best in the industry.[9] As it has grown, the company has also added wine and bottled beers to its beverage menu. In each new location the beverage menu is customized to the local flavors of the city in which it operates.[35]

When the company first began to expand, it became famous for its burgers, which are made from Angus beef.[9] Despite this popularity, New York Times reviewer Pete Wilson stated in his 2012 review of the establishment that the burgers were sometimes insufficiently salted and cooked to an unappealing gray.[36]

The company originally used pre-made, frozen crinkle-cut french fries because its original location was only 400 sq ft (37 m2) in size, and the limited area disallowed any other style of fry product. As the chain grew, it was praised in multiple reviews for its high quality hamburgers, but its fries were routinely criticized as not being on par with its other products. In response, the company developed a new, fresh cut french fry product in 2013. However, consumers preferred the frozen, crinkle-cut fries and the company reverted to those in the fall of 2014.[9]

Collaborations

Shake Shack has collaborated with other food and design companies and chefs to create products to serve at their restaurants. Foods and beverages include a chocolate bar with Mast Brothers,[37] a coffee stout with La Colombe and Yards Brewing Company,[38] and limited edition burgers with Atlanta chef Ford Fry and Philadelphia chef Marc Vetri.[39]

Merchandising

The company has collaborated with Staple Design to create Shake Shack T-shirts.[40]

See also

References

  1. ↑ "Stand for Something Good". Shake Shack. Retrieved 26 March 2017.
  2. ↑ "Food and drink". Shake Shack. Retrieved 2015-11-01.
  3. ↑ "Burgerzwerg erobert die Börse". Handelsblatt. 2015-01-30. Retrieved 2015-11-01.
  4. ↑ Ro, Sam (2015-01-30). "Shake Shack Opens For Trading". Business Insider. Retrieved 2015-11-01.
  5. ↑ "Burger mania: Shake Shack stock up 120%". CNN Money. 2015-01-30. Retrieved 2015-11-01.
  6. ↑ Driebusch, Corrie (2015-01-30). "Shake Shack Shares Surge in Market Debut". The Wall Street Journal. Retrieved 2015-11-01.
  7. ↑ "Shake Shack S-1". Shake Shack. Retrieved 30 July 2016.
  8. 1 2 Wolfe, Josh (27 January 2014). "The Secret Sauce of Shake Shack's Success". Forbes. Retrieved 27 May 2014.
  9. 1 2 3 4 5 Kramer, Katie (15 October 2010). "Shake Shack Founder Expands His Empire". CNBC. Retrieved 27 May 2014.
  10. ↑ "Shake Shack S-1". Shake Shack. Retrieved 13 July 2015.
  11. ↑ Powers, Jacquelynn D. (June 15, 2010). "The First Burger & Fries at Shake Shack South Beach". Miami New Times.
  12. ↑ "Shake Shack on Lincoln Road". Lincoln Road Mall. June 2010. Retrieved July 9, 2017.
  13. ↑ Victoria Pesce Elliott (August 18, 2010). "3 Stars for Shake Shack". Miami.com.
  14. ↑ Reiser, Emon (April 10, 2017). "Shake Shack in Miami Beach undergoes renovation". South Florida Business Journal.
  15. ↑ Levin, Sam (July 12, 2010). "Burger lovers rejoice! Minichain Shake Shack opens in Times Square". Daily News. New York. Retrieved July 12, 2010.
  16. 1 2 Gregor, Alison (January 19, 2010). "Square Feet: New Tenant Lifts a Manhattan Street". The New York Times. Retrieved August 3, 2011.
  17. ↑ Fabricant, Florence (August 4, 2010). "Diners Journal: Upper East Side Shake Shack Is Open". The New York Times. Retrieved August 3, 2011.
  18. ↑ Haughney, Christine (July 25, 2011). "More Crowded Crowds: Grand Central to Welcome Apple and Shake Shack". The New York Times. Retrieved July 30, 2011.
  19. ↑ Pasquarelli, Adrianne (2012-07-20). "Shake Shack gets sidetracked at Grand Central | Crain's New York Business". Crainsnewyork.com. Retrieved 2014-02-08.
  20. ↑ Pasquarelli, Adrianne (2012-10-26). "Grand Central tenant Zócalo files for bankruptcy | Crain's New York Business". Crainsnewyork.com. Retrieved 2014-02-08.
  21. ↑ "Danny Meyer's Shake Shack finally takes over Grand Central space | Crain's New York Business". Crain's New York. 2013-05-08. Retrieved 2014-02-08.
  22. 1 2 3 "Burger chain Shake Shack preparing for an IPO - sources". Reuters. 15 August 2014. Retrieved 15 August 2014.
  23. ↑ Lorenzetti, Laura (29 December 2015). "Fast food chain Shake Shack files for an IPO". Fortune. Retrieved 11 January 2016.
  24. ↑ Galarza, Daniela (27 April 2015). "Shake Shack Shares Jump to Over $70 Per Share". Eater. Retrieved 11 January 2016.
  25. ↑ Fahey, Mark (March 7, 2016). "Shake Shack's expansion by the numbers". CNBC.
  26. ↑ Shah, Khushbu (21 May 2015). "Is Shake Shack Adding Chicken Sandwiches to Its Menu?". Eater. Retrieved 16 January 2016.
  27. ↑ Morabito, Greg (7 July 2015). "Danny Meyer Enters Top-Secret Launch Codes for Nuclear Chicken Sandwich A-Bomb at Shake Shack". Eater. Retrieved 16 January 2016.
  28. ↑ Galarza, Daniela (14 January 2016). "Shake Shack Releases Chick’n Shack Sandwiches Nationwide". Eater. Retrieved 15 January 2016.
  29. ↑ Selvam, Ashok (August 31, 2016). "Shake Shack & Chicago Athletic Association Reach Deal To Offer Room Service". Eater Chicago.
  30. ↑ Selasky, Susan (February 23, 3017). "Detroiters celebrate Shake Shack's downtown opening". Detroit Free Press.
  31. ↑ Bertram, Charles (May 11, 2017). "Shake Shack opens at Lexington’s The Summit at Fritz Farm". Lexington Herald Leader.
  32. ↑ Peralta, Katherine (June 12, 2017)."Shake Shack is coming to Park Road Shopping Center". Charlotte Observer.
  33. ↑ "Shake Shack is a modern day 'roadside' burger stand serving the most delicious burgers, fries, hot dogs, frozen custard and more!". Shake Shake. Shake Shack.
  34. ↑ Galarza, Daniela (21 December 2015). "Shake Shack Expands to South Korea in 2016". Eater. Retrieved 11 January 2016.
  35. ↑ Bartiromo, Michael (13 February 2013). "The Man Behind Shake Shack's Menu". Mox news. Retrieved 27 May 2014.
  36. ↑ Levine, Ed (12 February 2012). "NY Times Shake Shack Review: Takedown or a Rare Bit of Fair-minded Burger Candor?". Serious Eats. Retrieved 27 May 2014.
  37. ↑ Raisfield, Robin (9 September 2015). "Mast Brothers’ New Shake Shack Chocolate Bar Comes Out This Week". Grubstreet. Retrieved 11 January 2016.
  38. ↑ LaBan, Craig (7 January 2016). "Shake Shack, La Colombe and Yards collaborate on a fundraiser coffee stout". Philly.com. Retrieved 10 January 2016.
  39. ↑ Mah, Evans (19 September 2015). "Ford Fry teams with Shake Shack for a one-day burger special". Atlanta Magazine. Retrieved 11 January 2016.
  40. ↑ Shack, Shake (12 September 2014). "Shake Shack x Staple Design LTD Collaboration". Shake Shack. Retrieved 11 January 2016.
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