Shake Shack enhances stores with tech, potentially boosting profits.

Shake Shack enhances stores with tech, potentially boosting profits.

Shake Shack Embracing Self-Service Kiosks for Enhanced Profitability and Labor Optimization

Shake Shack, the popular burger chain founded by New York City restaurateur Danny Meyer, is ramping up its efforts to control labor costs and improve profitability through the implementation of self-serve ordering kiosks. These kiosks, currently available in nearly 250 restaurants, have emerged as the most profitable ordering channel for the chain. The company plans to have self-ordering stations in all of its stores by the end of the third quarter.

CEO Randy Garutti highlights the convenience of the kiosks for customers, leading to higher check averages and, subsequently, increased profits. Additionally, Shake Shack’s sales have witnessed significant growth, exceeding 100% year-over-year, in restaurants equipped with kiosks. With 310 stores in the US, the company embraces the potential that kiosks offer for enhanced profitability and customer satisfaction.

The real win, however, lies in the realm of labor costs. Shake Shack’s Chief Financial Officer, Katie Fogerty, reveals that kiosks, along with other labor streamlining strategies, have resulted in a reduction of 50 labor hours per Shack per week compared to the previous year. This significant decrease in labor requirements translates into substantial cost savings for the chain. As Fogerty acknowledges the early signs of labor savings from kiosks, she reiterates the company’s intentions to continue leveraging this advantage over time.

Brandon Barton, the founder of Bite, a company specializing in digital ordering solutions, adds further insight into the benefits of self-ordering devices. Alongside freeing up staff to focus on hospitality-focused tasks, such as refilling drinks, kiosks also serve as valuable resources amid widespread staffing shortages experienced by the industry. Barton emphasizes that kiosks are the most profitable channel within restaurants, requiring minimal staffing while maximizing check averages and customer satisfaction.

While Shake Shack’s introduction of kiosks may seem like a recent development, these self-service ordering systems have been around for years in fast-food chains like Panera Bread, McDonald’s, and Taco Bell. Shake Shack itself began experimenting with kiosks back in 2017 when it opened its first kiosk-only store in New York City. However, it was during the pandemic, with the reopening of dining rooms and the scramble for labor, that restaurant chains began embracing cashier-less ordering systems and expanding their use of kiosks. Shake Shack’s kiosk rollout has been particularly impressive, growing from 90 in early 2022 to nearly 250 stores as of now.

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The increasing prominence of kiosks is not merely a trend but an essential part of the guest experience in the restaurant industry. Barton asserts that the most forward-thinking operators are pursuing 100% digital transactions, both in-store and online, with kiosks emerging as the preferred choice for in-store orders.

Aside from labor savings, Shake Shack’s kiosks have proven to have a positive impact on profits in other ways. The chain has observed reduced costs in packaging since kiosk orders are primarily in-house rather than digital. Furthermore, customers using kiosks tend to indulge in premium cold beverages, including high-margin items like shakes, leading to increased revenue.

The implementation of kiosks also aligns with Shake Shack’s commitment to hospitality, a core principle among all Meyer-founded restaurants. Shake Shack workers in certain stores have been reassigned to run food to tables instead of relying on buzzers to alert customers. This shift allows the company to enhance the level of service and optimize labor, emphasizing a seamless and personalized dining experience.

In summary, Shake Shack’s adoption of self-service ordering kiosks presents a win-win solution for the chain. The convenience and profitability of kiosks, coupled with the significant labor savings they offer, mark a strategic move to boost earnings and adapt to evolving customer preferences. As kiosks become an essential component of the restaurant industry, Shake Shack is positioned to thrive by catering to customer demands and optimizing operational efficiency.

• Digital assistants
• Kiosks
• Shake Shack