Shake Shack, the fast-casual restaurant chain, has had success with its use of kiosks. These self-service ordering stations have helped the company reduce labor hours and proven to be a high-margin channel, contributing to improved profitability.
According to analyst Peter Saleh from BTIG, Shake Shack is relying on the further implementation of kiosks to drive margins higher. In fact, management has noted that over 50% of in-Shack sales are now coming from kiosks, a significant increase from previous quarters, according to a Seeking Alpha report Monday (Nov. 6).
The adoption of kiosks has been a strategic move for the chain, aligning with the growing trend of digital sales in the restaurant industry. Currently, the company estimates that total digital sales, including kiosks, web, app, and delivery, account for approximately 80% of its overall sales.
Not only do kiosks contribute to improved financial performance, but they also enhance the overall customer experience. By offering self-service ordering options, Shake Shack has been able to streamline the ordering process, reducing wait times and increasing customer satisfaction. This aligns with the evolving preferences of today’s consumers, who value convenience and efficiency.
Despite the positive impact of kiosks on Shake Shack’s financial performance and customer satisfaction, the company has faced some challenges. Comparable sales trends have been mediocre, partially offsetting the gains made through improved restaurant margins and profitability. However, Shake Shack remains optimistic about its long-term unit and sales potential, buoyed by its category-leading brand and the ongoing opportunity to optimize kiosk usage.
Investors have also shown confidence in Shake Shack’s strategic use of kiosks, as reflected in the company’s stock performance, per the Seeking Alpha report. Despite a recent dip in share prices, Shake Shack’s year-to-date return ranks among the top performers in the restaurant sector, demonstrating market optimism about the company’s future prospects.
During Shake Shack’s Q3 2023 earnings conference call, CEO Randy Garutti and CFO Katie Fogertey discussed the company’s performance and future plans. Garutti highlighted Shake Shack’s focus on profitable growth and its strong execution of its strategic plan. The company reported a 21% growth in total revenue to $276 million, with a 2.3% growth in same-Shack sales. Garutti also mentioned the company’s expansion efforts, with the opening of 25 new Shacks in the third quarter and plans to open approximately 80 Shacks this year.