Customers at popular burger chain Shake Shack can expect to pay more as the company prepares to protect itself from inflation.
The company plans to raise its prices by 3% to 3.5% during the fourth quarter. The New York-based chain’s chief financial officer Katherine Fogertey relayed the news to analysts on a conference call last week.
She noted that the increase is “higher than the approximately 2 percent menu price [increase] we have historically taken at the end of most calendar years, and we’ll be evaluating the need for further price increases that might go into effect in 2022, depending on how the cost landscape evolves through the rest of the year.”
“The move comes as supply-chain hiccups, shortages, and other costs ripple throughout the economy, squeezing companies’ abilities to eke out a profit. Along with higher costs of goods, companies, particularly restaurants, now have to pay their workers more in order to attract experienced employees,” reports The New York Post.
Not only are menu items going to be more expensive, but delivery will cost more as well. Shake Shack also plans to add a 10% charge for deliveries through third-party services — double the 5% charge the company announced in February.
Shake Shack CEO Randy Garutti defended the decision to analysts, saying the decision had not been taken lightly.
“We are very conservative, and we are very long-term thinkers … We do not know yet whether inflationary pressures will be transitory, how long they will last, and there is just no reason to take too much at a time when there’s a lot of uncertainty in the world,” Garutti said.
“As an example, a ShackBurger that currently costs $6.19 in Manhattan would go to $6.41 following a 3.5 percent increase. Likewise, the $4.99 Chick’n Bites would go to $5.16 and the $3.15 fries would cost $3.26,” per The Daily Mail.
“The consumer price index increased 5.4% from a year earlier, the largest jump since August 2008, just before the worst of the financial crisis,” according to CNBC. “Policymakers at the Federal Reserve and the White House expect the current pressures to begin to ease, though central bank officials have acknowledged that inflation is stronger and perhaps more durable than they had anticipated.”
Shake Shack is one of many chain restaurants that raised prices to accommodate for higher wages and increased food and shipping costs. Menu prices at Red Robin, Texas Roadhouse, Cracker Barrel, Taco Cabana, and Chipotle also jumped due to constraints on the food supply chain and labor shortages.
Currently, Shake Shack offers free fries to anyone who has gotten a COVID-19 vaccine if they are able to show their vaccination card.