Shake Shack CEO Rob Lynch said it has become clear that the crazy pricing of the inflationary post-pandemic years has to end.
Now Shake Shack is focusing on driving traffic with culinary innovation and more targeted marketing, Lynch said at the Baird 2025 Global Consumer, Technology & Services Conference in New York on Thursday. And, though he didn’t reveal what’s coming, he offered some hints about Shake Shack’s evolving strategy as the 580-unit fast-casual brand pushes to reach 1,500 locations.
“One of the beautiful things about our brand is, we’re not Habit Burger. We’re not In-N-Out Burger. We’re not burger. We’re Shake Shack. We don’t have to be tied to burgers,” he said.
The year started out well for Shake Shack, but Lynch said things took a turn—for the chain and the industry—after the Presidential inauguration.
Same-store sales for the first quarter were up 0.2%, driven by an average check increase of about 4.8% because of higher prices. The results were $8 million below their revenue targets, Lynch said.
“We had a really tough February and a little bit of a better March, but then a soft April,” he said, saying sales were down 1% in April.
As a result, Lynch said the chain decided to put on hold a price increase that was in the plans for March.
For the second quarter, Shake Shack dropped 2% in pricing, but the company still expects to grow comparable sales to low single digits, even without raising prices.
To do that, Lynch said the chain is focusing on boosting traffic and mix with culinary innovation, as well as marketing and better leveraging loyalty and guest relationships.
When Lynch arrived with the brand about a year ago, there wasn’t a pipeline of new menu items lined up. That’s why Shake Shack brought back the truffle promotion, which Lynch said “ran out of gas” in the last couple months of the first quarter.
In January, however, Shake Shack brought in Nancy Combs as senior vice president of culinary and calendar innovation, who worked with Lynch previously at Papa Johns.
“She has built an innovation stage-gate development process. We have an unbelievable pipeline for the next 18 months, built out,” said Lynch.
The plan is to innovate on burgers, he said. “In fact, we’re working to make our burgers even better right now, our core burgers.”
But Shake Shack is also looking to do more beyond burgers, like sandwiches, side items and beverages.
“We should be a beverage destination,” said Lynch.
The goal will be to trade customers up to premium innovation, he said. “So we don’t have to charge them more for the same stuff, like we had to in the past.”
Currently, Shake Shack is featuring fried pickles, which Lynch said are “killing it” and driving traffic, without really being advertised.
The chain is designing promotions so they don’t dilute margins.
Lynch said Shake Shack is the type of brand where people might not come as often, but when they come, they order more—burgers, fries and shakes, he said. If Shake Shack gives discounts on high food cost items, then guest attachment rates on lower-food-cost items go up, which benefits margins, he said. The brand has pledged to improve margins for the next three years.
“So we are working to make sure that our promotions bring people in, and, when they do, they’re buying a bunch of stuff,” he said.
Shake Shack is also working on its broader marketing strategy, defining who the target guests are and how to best reach them.
Lynch, who in the 20-teens spearheaded the “We Have The Meats” marking campaign while president of Arby’s, said he has brought in some of the same people to work on Shake Shack.
“That transformed our brand at Arby’s. I have turned around a brand that was dead,” he said. But “we don’t have to turn anything around here. People already love this brand. We just have to be smart enough to tap into why, and then distill it and then send it out into the world.”
And at the heart will be culinary innovation, he said, “with stuff that nobody’s seen in the industry before.”
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