Four Quarterly Reports & Two Mergers

From by Burger Business
Four Quarterly Reports & Two Mergers

◊ Shake Shack is doing so well it can tell competitors what its next pitch will be and dare them to hit it.◊

CEO Randy Garutti told analysts (and everyone listening in) Shake Shack will deliver a double promotion in Q1 of 2017: a new BBQ ShackMeister burger and a BBQ Chick’n Shack sandwich with a proprietary BBQ sauce. The Bacon Cheddar Shack will return in 2017.

Garutti said the Chick’n Shack sandwich has remained among the top 3 in sales since its national introduction, guaranteeing continued chicken innovation in 2017. The Salt & Pepper Honey Chick’n Shack continues to test in Brooklyn.

Shake Shack plans a BBQ version of the ShackMeister burger it did as a 2014 LTO.

Shake Shack plans a BBQ version of the ShackMeister burger it did as a 2014 LTO.

For Q3, ended Sept. 28, 2016, Shake Shack sales increased 40.2% as the number of units open was up 41% compared with a year ago. Same-store sales rose 2.9%, comprised of a 3.6% jump in price/mix and a 0.7% decrease in customer traffic. A menu price increase of 1.5% to 2% in January 2017 is planned.

The chain closed the quarter with 110 locations (up 10) and it is projecting 21 to 22 domestic openings in 2017. That will include first stores in San Diego (La Jolla), Detroit and St. Louis.

◊ Wendy’s Co. reported Q3 North American systemwide same-store sales increased by 1.2% at franchised stores, 2.7% at company stores. CEO Todd Penegor said the chain saw “strong customer count growth and a slight increase in average check. He pointed to the upgraded Grilled Chicken Sandwich introduced in early September, a 50¢ Frosty promotion and adding the Swiss Junior Bacon Cheeseburger to the “4 for $4” value menu as primary sales drivers.

Penegor said the chain will hit its goal of reducing company stores to 5% of the system by the end of this year. Also on schedule is Wendy’s remodeling program, whih has refurbished 28% of the system so far.

◊ Diversified Restaurant Holdings said Q3 same-store sales for the 59 Buffalo Wild Wings it operates were down 1.8% as a result of a 3.3% decline in customer traffic partially offset by a 1.5% increase in pricing. CEO David Burke cited over saturation in the casual-dining market as a reason for the softness.

Bagger Dave's Great American Cheeseburger

Bagger Dave’s Great American Cheeseburger

And yet Diversified’s 19 casual-dining Bagger Dave’s Burger Taverns saw a 10% increase in average weekly sales during the quarter. The chain benefited from a $5.95 Great American Cheeseburger Tuesday Special and a one-day (Oct. 4, 2016) offer of that cheeseburger for just 99¢. Diversified plans to spin off Bagger Dave’s by year-end.

◊ The Habit Burger Grill reported a Q3 comp sales increase of 0.2% for company stores, the result of a 2.6% increase in average check offset by a 2.4% decline in customer transactions.

President-CEO Russ Bendel said consumer response to the $6.25 Golden Chicken Sandwich that the chain introduced in mid-October (with an announced end date of Nov. 22) “has been overwhelmingly positive. In fact, it has quickly become one of our top-selling menu items and based on guest feedback we are considering extending it throughout the [current] quarter.” A Hatch Chile Festival promotion featuring a Hatch Chile Charburger, Hatch Chile chicken sandwich and Hatch Chile chicken salad also did very well, Bendel said.


Two restaurant mergers involving major multi-concept operators have burger implications as Neil Perry has sold most of his restaurants to a conglomerate and Landry’s Inc. is moving to buy BR Guest.

A burger at Bill's Bar & Burger in New York City.

A burger at Bill’s Bar & Burger in New York City.

Australian chef Perry has expanded his Burger Project chain to seven locations in just two years. Now his Rockpool Group has sold that concept plus its three Rockpool Bar & Grills, two Spice Temples and Rosetta to Urban Purveyor Group, which operates Fratelli Fresh and other brands. The joint company is called The Rockpool Dining Company and includes 47 locations and 15 brands.

More than 20 more Burger Projects are planned. Perry reportedly has his sights set on opening restaurants in Los Angeles and/or London.

Landry’s already owns more than 50 restaurant brands, including McCormick & Schmick’s, Chart House, Bubba Gump Shrimp and Rainforest Cafe. If an acquisition of BR Guest is finalized, Landry’s adds such New York City concepts as the three-unit Bill’s Bar & Burger, Dos Caminos, Atlantic Grill and others.

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