Dive Brief:
- Shake Shack same-store sales rose 1.8% in Q2 2025, driven by a shifting order mix and increased prices, but partly offset by a decrease in traffic, according to the brand’s Q2 shareholder letter.
- The brand will increase its paid media ad spend as a strategic component of its business, CEO Rob Lynch said during the chain’s earnings call.
- An early use of that ad spend, CFO Katie Fogerty said, would be to support promotions like the chain’s Dubai Chocolate Shake.
Dive Insight:
To capitalize on the success of its core operations and the buzz driven by limited-time menu items, Lynch said the brand was looking to launch paid media advertising at scale. An emphasis on paid media is a departure from the brand’s pervious strategies, Lynch said.
“It’s hard to believe, but all of the marketing has always been word of mouth, earned media and bottom of the funnel promo activations,” Lynch said.
The chain began testing paid media programs in select markets over the last two weeks. While test results aren’t recorded in the brand’s Q2 earnings report, Lynch said the company was “ecstatic” with the results.
Lynch said Shake Shack’s marketing focus would be on setting the chain apart from fast food competitors. A focus on the brand’s identity and premium menu items could help the chain take occasions from QSR burger brands, which have struggled to grow same-store sales as pricing pressure has eroded QSR’s traditional value edge over both casual dining and fast casual competitors. Chili’s, in particular, has seen its efforts to contrast its burgers with fast food drive astronomical traffic growth.
“We’re making these investments because we do believe that they will drive sales and margin expansion, but that is not in the guidance today,” Fogerty said.
