Shake Shack isn’t interested in becoming a fast-food company, CEO Randy Garutti said. But recent strategies are blurring the lines.

For example, the chain has 30 drive-thru restaurants. And these are the traditional kind with a speaker box, not the digital order-ahead lanes used by other fast casuals, like Chipotle. Given Shake Shack has opened several drive-thru locations, and also added other service channels like delivery and in-store kiosks, it’s no coincidence the brand is conducting time-motion studies and targeting throughput improvement for the first time. It simply doesn’t operate the way it did years ago.

The chain hopes to reduce guest order times by roughly 30 seconds, and even more at drive-thru locations. The company plans to achieve this through new kitchen flows that will roll out throughout 2024, increased real-time reporting, and new training. At the same time, “continuing to cook to order at the highest-level quality in the burger industry,” will remain a core mission of the brand, said Garutti.

Because of Shake Shack’s commitment to made-to-order operations, ticket times are usually six to eight minutes. The objective is to improve this, but not at the cost of tarnishing the brand’s position as a fast casual.

“It’s really not a regional question. It’s more of a volume question,” said Garutti, explaining how ticket times compare across the system. “Obviously, when you’re busier, sometimes those times extend. Our goal for this year is consistency and continue to just improve and be relied upon better for what our guests can expect. So that’s the goal we’ve set out there. Ambitious target for our teams to knock 30 seconds off the average order over the course of this year. This is going to take time, it’s not tomorrow.”

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The chain has tested several kitchen flows for the past year and a half to help food move through the back-of-house more efficiently. That’s something Garutti wants to emphasize—it’s more about the way food and beverages are handed off, not about renovations or another costly change. Most new stores will open with the linear kitchen model that changes the flow. Some existing units will convert.

Another first for Shake Shack—the chain is testing combo meals, a feature commonly used by fast-food competitors. The initial feedback is that customers enjoy the offering at the drive-thru. Garutti knows that “shouldn’t be a shocker to anybody in the industry,” but the question is whether combo meals are right for Shake Shack in the long term.

“Part of our drive-thru goals is that speed is a goal here,” he said. “We know Shake Shack is not the fastest and we want to test how people react to that. … We’re trying various pricing strategies, various visual and merchandising strategies, and things that do not put us in that fast-food category, but still really give that consistency to the guests.”

Garutti said the brand and its operators are “big believers” in drive-thru and that the format is key to capturing market share, hitting major growth goals, and filling whitespace in the U.S. The chain opened 18 of these locations in 2023; a smaller percentage will come this year, but a significant commitment nonetheless. The CEO admitted that Shake Shack is learning how to optimize its drive-thru restaurants. Some are below expectations, some are above, and a lot are in the middle. The brand is continually working through what would be the best prototype, and it’s seemed to settle on a version that is smaller with less seating to remove certain build-out costs.

The idea is to open these stores in Shake Shack’s higher brand awareness markets.

“We’ve got some in California, we’ve got some in New York, New Jersey, and that’ll be exciting for us to learn how that goes and how people choose to use Shake Shack at a drive-thru experience,” Garutti said.

In the areas where Shake Shack isn’t as well known, the chain plans to ramp up its advertising spend, which is at roughly 1 percent—a fraction of its peer set, Garutti said. The company has tested this in high-potential markets on the West Coast and Texas. Sometime the advertising will go along with new unit openings, but usually, the chain is going after one-to-one digital opportunities. Don’t expect to see a “whole lot of TV commercials and the things you might traditionally think” from Shake Shack in the future, the CEO noted.

Shake Shack has nearly doubled its footprint since 2019, but the company believes it’s still early in its growth journey and therefore has a big opportunity to build more brand awareness. The chain finished 2023 with 518 restaurants systemwide, including 334 in the U.S. It opened a record 85 units last year and another 80 or so outlets are coming in 2024.

Some examples of countrywide marketing efforts: partnership with the “Trolls Band Together” movie, a promotion where restaurants would give away free chicken sandwiches if an NFL player did the chicken dance after scoring a touchdown, and a “free Fridays” deal on third-party delivery websites.

“We’re not big enough yet to capture the kind of scale that we’d love to have a Super Bowl commercial someday, right?” Garutti said. “We’re just not there yet, but there will be a day where that can happen. Today, we’ve got to test and learn into the strategies that we’re getting a strong return on.”

Shake Shack’s same-store sales increased 2.8 percent in Q4 year-over-year, led by 1.4 percent traffic growth across in-store and digital channels. Average weekly sales were flat at $76,000 per store per week, or about $4 million in annualized AUV. January comps were flat with an approximate low-single-digit headwind from unfavorable weather, as well as pressures from comparing over a strong January 2023. Outside of weather impacted weeks, fourth-quarter momentum continued into January. Shake Shack didn’t provide specific numbers around February, but did reveal that trends have improved from January levels.

Store level operating profit in Q4 grew 25 percent to $55 million and margin lifted to 19.8 percent thanks to key sales-driving initiatives, optimization of labor, and expense management. A big help has been kiosks, the chain’s highest-margin channel. Shake Shack launched the machines in nearly all U.S. company stores, and they’re bringing a high-single-digit check lift versus the traditional cashier experience.