Yahoo Finance Shake Shack sees major 'sales potential' in drive-throughs, CFO explains
Shake Shack (SHAK) is betting big on drive-throughs — and seeing encouraging results.
At the 29th annual Goldman Sachs Retail Conference on Wednesday, Shake Shack CFO Katherine Fogertey told Yahoo Finance's Brian Sozzi that the company is still "very early" in this new format, "but what's very exciting is the sales potential that we have at drive-throughs."
Shake Shack, which originated as a hot dog stand in Madison Square Park, New York, has opened six drive-throughs so far. According to the company, each of the drive-throughs generated more than $80,000 in average weekly sales over the past four months ending in July, higher than the company-operated average.
By the end of 2023, the roadside burger chain plans to have at least 20-25 Shake Shack drive-throughs open, making up 20% of new locations added this year. In the second quarter alone, the company opened two drive-through locations in Castle Rock, Colorado, and Chesterfield, Missouri.
"We're building added convenience at touch points where our guests really want that, and we're also providing them a great in-Shack experience," Fogertey explained. "So if you're with your kids and you're in a rush, come through our drive-through, get your dinner, get your lunch. But if you want to hang out for a little bit longer with the family or with friends... come into the Shack. Hang out, eat. It's a great experience."
While foot traffic in urban markets, the core of Shake Shack's business model, is slowly coming back after a hit from the COVID-19 pandemic, that recovery is not coming at the expense of suburban stores.
In the second quarter, urban same-stores were up 19% compared to a year prior, echoing the levels of growth seen in the first quarter. Meanwhile, suburban same-stores sales were up 3% year over year, only slightly lower than the 4% gain in Q1.
"Throughout the entire pandemic, we've had a pretty resilient suburban business," Fogertey emphasized. "We didn't have nearly the same impact that we had in our urban markets, and it's been really exciting to see that momentum still hold, and we're still building on that, even with the urban recovery coming out here."
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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