Expansion and store models
Another foundational part of Shake Shack’s evolution is building proper infrastructure to support digital growth.
The chain opened 20 stores in 2020 despite COVID-19, including No. 300. The brand expects to open 35 to 40 stores in 2021 and 45 to 50 in 2022, with targeted openings in both urban and suburban markets. Shake Shack is setting a goal to reach company-operated unit growth of roughly 45 percent in the next two years, which would see its corporate footprint rise from 183 to between 262 and 272 in 2022.
As CEO Randy Garutti explained, Shake Shack has proven its concept in free standing pads, urban centers, food courts, and shopping centers. But with digital now at the forefront, Garutti said it’s now time to show Shack Shack can win with walkup windows, drive-up windows, drive-thrus, and small, digitally focused stores.
At the crux of this is Shack Track, which will be incorporated into new stores, with more than half of the 2021 class utilizing either curbside, walkup, or drive-up.
“It really is our enhanced digital order pickup solution,” Garutti said. “The goal is to reduce that friction. We know that Shake Shack has always had friction in the order and pickup experience, especially.”
Shake Shack’s first drive-thru will open in Orlando; five to eight are scheduled to open across the U.S. by 2022. Garutti said the brand has a lot to learn about drive-thru, but that it’s committed to that learning. One of the goals is to not only provide convenience, but to attract consumers to the dine-in experience.
“It’s not just a box where you go around and get your food,” Garutti said. “But for those times I need that convenience, it’s there.”
Eight walkup windows—both new and conversions—opened in 2020, and more are planned for this year. One Colorado store even includes a separate entrance and vestibule area for digital and delivery pickup. In addition, last year a Shack Shack in Vernon Hills, Illinois, was converted into the first drive-up window store. About five more are planned for 2021, including one in Danbury, Connecticut. Shake Shack is also planning urban-based digital stores that have small interiors to decrease investment costs, but also experiential outside dining.
Although Shake Shack is moving ahead with the innovative designs, that’s not to say Shake Shack still doesn’t believe in its flagship design.
“Our core that built this company is great experience,” Garrutti says. “We’re going to continue to do that more than ever.”
Shake Shack opened 23 licensed stores last year, including a 35 percent increase in the Asian market. Fifteen to 20 licensed Shacks are planned for this year and 20 to 25 are expected in 2022; the growth will focus mostly on Asia. Currently, there are 128 licensed stores—106 of them outside the U.S.—and the company wants to see 163 to 173 by 2022.
The company sees the best potential in China, where there’s seven stores open and three development agreements in place for the Mainland.
“We’re still a relatively small company,” Garrutti says. “To have this global impact, to have this love and appreciation for the brand in so many places, is exciting and just shows the whitespace.”