This Beloved Burger Chain Is Raising Its Prices Next Month
In order to offset rising labor and supply costs, one beloved burger chain is about to get a whole lot pricier—signaling the company's second price increase in the past five months.
In the company's fourth-quarter earnings call on Thursday, Shake Shack CEO Randy Garutti said the cost of burgers, fries, and shakes will rise by 3.5% in March. Prices rose by that same percentage back in October, bringing the cost of your meal up by 7% since then.
"For us to be at [a] 7% [price increase] is indicative of the time we're living in," Garutti said on the call. "We believe these current price raises are necessary to protect margins."
Clearly, this is not the first time fast-food customers have seen the price of their meals increase. Just this week, Eat This, Not That! reported that the price of McDonald's Big Mac has seen a 40% price increase in the past decade, and much of it is due to inflation.
Shake Shack isn't alone in its price hikes. Chipotle, Burger King, Little Caesars, McDonald's, and Starbucks have all raised their prices this year for items like burritos, burgers, pizzas, and even sodas.
Restaurants have been raising their pay rates to attract new staff as well; something that Shake Shack has done this past year. Amid huge staffing shortages, average hourly wages for non-supervisor workers rose by almost $2.50 over the course of 2021—equaling to $16.31 per hour on average, according to the Bureau for Labor Statistics.
In 2021, Shake Shack brought in a whopping $739.9 million in sales, according to its end of year fiscal report released on February 17. The chain also opened 13 new locations across the country at the end of the 2021 alone, including its first drive-thru locations in Minnesota and Missouri.
Garutti said that while a number of COVID-related challenges continue to affect Shake Shack's operations, the chain is still seeing an increase in sales—up by 13% in February so far.
"As we look back on 2021, we remain incredibly grateful and proud of how our Shack family has continued to overcome the many challenges we've faced," Garutti said in the report. "However, our sales were impacted by the sharp increase in Omicron cases in fiscal January, causing a decline in traffic, lost hours, and Shack closures. While a return to pre-COVID movement patterns remains uncertain, we are pleased to see improvement through fiscal February."
For more on fast food, check out Chick-fil-A Is Bringing Back This Sandwich For the First Time Since 2019.