- Shake Shack partnered with Goldbelly to launch a cook-at-home burger kit nationwide, CEO Randy Garutti told CNBC.
- The kits can be ordered online for delivery and include cheese, buns and Shake Shack’s signature sauce. A kit costs $49 for an eight-pack of patties, slightly higher than what eight ShackBurgers would cost, at around $42.50.
- The launch comes on the heels of the company’s update to investors on April 2, which disclosed that same-store sales in March were down 29% versus last year, with sales down between 50% and 90% overall systemwide. The company has had to cut 20% of its corporate staff and reduce salaries for remaining corporate employees and executives, among other cost saving strategies.
There isn’t one drive-thru in Shake Shack’s entire 280-unit system, which is why those dismal sales numbers — despite the chain’s shift to a to-go-only model — reflect the performance of its casual dining peers across the industry. According to The NPD Group, full-service customer transactions dropped by 71% for the week ending March 22 versus a year ago.
However, Shake Shack could find some traction through this new meal kit revenue stream. By offering a meal kit, the chain seems to be hitting on an emerging trend from the coronavirus crisis: meal kits are in high demand. According to the Washington Post, for example, HelloFresh is expected to generate about three-fourths of the profit that analysts predicted for the full year in Q1 alone. Blue Apron and Home Chef are also seeing a an uptick in new customers, eMarketer reports.
Since meal kits are cooked by the customers themselves, they likely cause less anxiety about food safety. Such demand perhaps explains why other restaurant brands, including Torchy’s Tacos and Seoul Taco, have also added meal kits.
Meal kits are also a way for restaurants to unload some of their perishable supply, which might otherwise go to waste as sales numbers plummet.
Shake Shack is doing more than offering meal kits to entice off-premise diners, however. It has added a high-end Steak Frites dish available to-go at a limited number of units. It has also expanded its delivery partnerships beyond Grubhub to also include Postmates, Uber Eats, Caviar and DoorDash, according to a press release.
Garutti told CNBC this meal kit launch “makes sense for the moment,” but hinted that such changes will extend beyond the pandemic, changes that could affect the very “community gathering place” personality Shake Shack has created.
To get back to its record growth over the last two years, Shake Shack will have a significant climb when the crisis ends. But these adaptations — extending its brand into meal kits, expanding delivery, “doubling down on its app” (as Garutti told CNBC) — give the chain the type of agility needed to maintain brand loyalty and make it to the other side of this pandemic.