Speaking to Garutti’s earlier point with remodels, the conversation extends well beyond zip codes. The brand expanded through a mix formats in 2019, and also added a number of premium food court and airport venues. The most recent was in Las Vegas.
Moving forward, Shake Shack will look to urban, freestanding pads, and shopping lifestyle centers. To start. And notably, the brand plans to pilot additional formats, Garutti said, including “a few” urban units with smaller footprints that integrate digital ordering and an improved pickup experience. They key retraction, space wise, will show up in the dining room.
Shake Shack has a Manhattan opening on deck for late 2019 that has “very few seats inside,” Garutti said, “and [is] built for the digital and delivery experience.”
The fast casual famously tried a cashless Astor Place store to mixed results, but that store was still close to 4,500 square feet. Garutti said the new units will range between 2,000–2,500.
And the design, Garutti added, will “do its best to separate in a … better guest experience fashion.” More focused on the digital pick-up journey than the ordering one.
“That will be an interesting test for us,” he said. “And we've got a few more of those, not just urban, but some throughout the country that we are going to test that are different formats that will teach us some things.”
Garutti said Shake Shack needed to rethink restaurant layout as the percentage of digital sales rise every year.
“Those are orders that are originating outside Shake Shacks,” he said.
Shake Shack is far from a Big Apple brand these days. Today, 85 percent of all locations are located outside New York City. For the trailing year ending in Q3, the company added $131 million in total sales with growth of just under 3 percent in same-store gains.
Unlike some brands, comps are a relatively small part of Shake Shack’s overall performance given how fast it’s growing. Less than 7 percent of the brand’s same-store sales expansion in the past year has come from base restaurants. Currently, Shake Shack’s comp base mixes just 54 percent of its total footprint, decreasing to 52 percent by year’s end.
Essentially, it’s difficult to judge Shake Shack’s progress by marrying the top line. The chain’s trailing 12-month average-unit volume sits at $4.2 million, with average weekly sales of $80,000. That should decline as the total store count grows, then level off. CFO and president Tara Comonte said AUVs will run about $4.1 million for the full calendar.