Adding Drive-Thru Lanes And Displays Boosting Shake Shack Sales

August 9, 2022 by Dave Haynes

One of the changes the pandemic triggered in the QSR business is the broader adoption of drive-thru lanes and related technology, at first because during lockdowns that was the only way operators could stay open (plus delivery) and then because consumers got used to drive-thru.

Drive-thrus allowed operators like McDonalds and Tim Hortons to somewhat weather the COVID storm, and it made other chains like Chipotle, Panera and Shake Shack take a hard look at adding that feature at its stores – even though their businesses have relied heavily or entirely on walk-ins.

It presented an opportunity for digital signage companies to equip these kinds of companies with the displays, infrastructure and management software to deliver drive through pre-sell promotion and ordering set-ups.

Shake Shack opened its first drive-thru late last year, and now the company (OMG good burgers and shakes!) is starting to talk about the impact. The CEO of the chain told QSR the six locations that now have drive thru lanes and displays are averaging higher weekly sales than the conventional, walk-in based stores.

QSR reports:

In the past four months, average weekly sales per restaurant trended above $80,000, equating to a $4.16 million annualized AUV. It’s higher than Shake Shack’s Q2 systemwide average, $76,000, which is the best mark since COVID began. The drive-thru is mixing 50 percent, consistent with Shake Shack’s targets. The chain didn’t provide frequency data, but CEO Randy Garutti did share that because of drive-thru convenience, consumers appear to be coming more often than a traditional suburban format.

Granted, it’s still early days. Six are open (Colorado, Virginia, Georgia, California, Missouri, and New York), and at least four more are scheduled to debut before the year is over. Garutti also noted drive-thru units haven’t always been fully staffed and that a few of them opened in the thick of Omicron during December and January.

“So all the data is brand new. We obviously want to be careful not to share too much data at this early stage, but we continue to be encouraged about the AUV potential, number one, which is what I led with in my comments, as well as the long-term profit and return metrics that we think we can get out of this model,” Garutti said during the company’s Q2 earnings call. “I think it’s going to open up new real estate opportunities all over the country for us, could increase our longer-term [total addressable market], and we’re really excited about it.”

I don’t know who supplies the drive-thru display technology stack for Shake Shack, and there are many outdoor display firms selling into drive-thru. This expanded market is, I’m guessing, important because there are a lot of suppliers, and also because the bug guys – like McDonalds – are already built out, with drive-thru displays the norm.

Leave a comment