Shake Shack
 | |
| Company type | Public |
|---|---|
| NYSE: SHAK | |
| Industry | Restaurants |
| Genre | Fast casual |
| Founded | New York City, New York, United States (2004) |
| Founder | Danny Meyer |
| Headquarters | , United States |
Number of locations | 63 (2015) |
Area served | Worldwide |
Key people |
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| Products | |
| Website | www |
Shake Shack is a fast casual restaurant chain based in New York City. It started out as a food cart inside Madison Square Park in 2000, and its popularity steadily grew. It eventually moved to a stand within the park, expanding its menu from New York-style hamburgers to one with hamburgers, hotdogs, fries and its namesake milkshakes. Despite initial growing problems with quality control and complaints regarding its french fries, it has been consistently well reviewed in the markets into which it has expanded.
Shake Shack filed for an initial public offering of stock in late 2014 and revealed in a December 29 filing with the Securities and Exchange Commission that sales growth in stores open for more than a year had slowed to 3 percent in the year ended September 28, from 7 percent in 2012.
History
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 turn the park around was to host an art exhibit inside of the park to raise awareness of the renewal effort. 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.[1]
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 locations sales continued to grow, the group realized that there was a market for expansion.[1]
Since its opening, Shake Shack has grown to be the largest part of the USHG's portfolio. Its average store performance of US$4 million is more than twice that of McDonald's average store performance within the United States.[2] 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.[2]
In August 2014 reports surfaced that the company was preparing to go public with an IPO and was discussing an underwriting with a number of investment banks.[3]
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.
Menu
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Shake Shack's eponymous product is its milk shakes, which have been reviewed as some of the best in the industry.[2] 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 it is operating in.[4]
When the company first began to expand, it became famous for its burgers which are made from Angus beef.[2] Despite this popularity, there were initial problems with the consistency of its sandwiches.[5]
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 as its other products. In response, the company developed a new, fresh cut french fry product in 2007. Since then, all of its french fries are fully prepared in-house, par-cooked and fully fried at the time of ordering.[2]
Operations
Domestic
In 2010, Shake Shack restaurants were opened in the Theater District[6] and the Upper East Side.[7][8] 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."[7]
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.[9] 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."[10] The suit was dismissed and Zócalo appealed. In October 2012 Zócalo filed for Chapter 11 bankruptcy protection.[11] In early May 2013, Zócalo vacated the space, and the new outlet opened for business on October 5, 2013.[12]
In 2010, Shake Shack opened its first restaurant outside of New York City in Miami Beach's South Beach neighborhood.[13] Before August 2014, the Shake Shack outlets were operating in Washington DC, New Jersey, Las Vegas (as of December 2014), Connecticut, Pennsylvania, Florida, Georgia and Massachusetts, in addition to New York.[3]
International
Shake Shack has outlets in a number of international cities including London, Istanbul, Moscow, Beirut, Dubai, Abu Dhabi, Doha and Kuwait City.[3]
See also
References
- ^ a b Wolfe, Josh (27 January 2014). "The Secret Sauce of Shake Shack's Success". Forbes Magazine. Retrieved 27 May 2014.
- ^ a b c d e Kramer, Katie (15 October 2010). "Shake Shack Founder Expands His Empire". CNBC. Retrieved 27 May 2014.
- ^ a b c "Burger chain Shake Shack preparing for an IPO - sources". Reuters. 15 August 2014. Retrieved 15 August 2014.
{{cite news}}: Italic or bold markup not allowed in:|publisher=(help) - ^ Bartiromo, Michael (13 February 2013). "The Man Behind Shake Shack's Menu". Mox news. Retrieved 27 May 2014.
- ^ 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.
- ^ Levin, Sam (July 12, 2010). "Burger lovers rejoice! Minichain Shake Shack opens in Times Square". Daily News (New York). Retrieved July 12, 2010.
- ^ a b Gregor, Alison (January 19, 2010). "Square Feet: New Tenant Lifts a Manhattan Street". The New York Times. Retrieved August 3, 2011.
- ^ Fabricant, Florence (August 4, 2010). "Diners Journal: Upper East Side Shake Shack Is Open". The New York Times. Retrieved August 3, 2011.
- ^ Haughney, Christine (July 25, 2011). "More Crowded Crowds: Grand Central to Welcome Apple and Shake Shack". The New York Times. Retrieved July 30, 2011.
- ^ Pasquarelli, Adrianne (2012-07-20). "Shake Shack gets sidetracked at Grand Central | Crain's New York Business". Crainsnewyork.com. Retrieved 2014-02-08.
- ^ Pasquarelli, Adrianne (2012-10-26). "Grand Central tenant Zócalo files for bankruptcy | Crain's New York Business". Crainsnewyork.com. Retrieved 2014-02-08.
- ^ "Danny Meyer's Shake Shack finally takes over Grand Central space | Crain's New York Business". Crainsnewyork.com. 2013-05-08. Retrieved 2014-02-08.
- ^ Victoria Pesce Elliott. "3 Stars for Shake Shack" (PDF). Shakeshack.com. Retrieved 2014-02-08.