Shake Shack Returns to its Roots

Karl Marx will have to wait; the machines will not yet replace us.  The fully-automated ordering system Shake Shack put in place at it’s newish Astor Place location is being terminated to bring back people and cash.

On the most recent earnings call, CEO Randy Garutti discussed the feedback that the chain has received about this unit in particular.  Voices came in clearly via Twitter, Yelp, and direct feedback: guests want the option to pay in cash and want to place their orders with a person.

When Shake Shack opened the Astor Place location in 2017, it was touted as the company’s first foray into self-service kiosks and cashless operations.  The benefits of both are obvious–less labor, lower risk of theft, less waste, and more-accurate ordering.

However, the backlash came in hard and fast from guests who didn’t want to wait on the kiosks and who were inconvenienced by the credit-only policy.  Shake Shack is reinstating a cashier for all open hours and will begin accepting cash with said cashier.  The kiosks will be rolling out to other locations–but not in replacement of the cashiers.

Shake Shack has consistently be posting huge growth.  In 2016, average unit volumes were 3.5x the burger-segment median, at $4.5m.  However, net income was only 6.2%–a far cry from industry elder McDonald’s 20%.

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