Steak ‘n Shake will announce today that it will not raise menu prices in 2016. The move comes as other chains have been hiking menu prices to cover rising labor and other operational costs, as well as to compensate for soft customer traffic.
For example, Shake Shack this month took another menu price increase, following a 3% hike in January 2015 and another 3% last September. But at least price increases aren’t accounting for all of Shake Shack’s gains. Its hefty 17.1% increase in same-store sales for the quarter ended Sept. 20, 2015, was achieved through a customer traffic increase (8.1%) as well as a 9% gain from higher menu pricing and shifts in mix to premium items. Others, such as Red Robin Gourmet Burgers and Wendy’s benefitted from menu price increases in Q3 that offset customer traffic declines.
It isn’t food costs that is forcing up menu prices. Other than a 14.8% spike up in egg prices last year, most core foods saw price declines in 2015, according to the Consumer Price Index. The index for food-at-home decline by 0.4% last year while full-service restaurant meals were up 2.3% and limited-service meals rose by 2.5%.
Average checks at QSR burger concepts have been rising with the introduction in the last two months of many new premium-price items, including Shake Shack’s new $6.29 Chick’n Shack, Burger King’s $6.49 A.1. Hearty Mozzarella Cheeseburgers and Sonic’s $5.99 Ultimate Chicken Sandwich.
Steak ‘n Shake says it will celebrate its price freeze by offering guests who use its Steak ‘n Shake Mobile Rewards App one free Classic Milkshake. Said Steak ‘n Shake Chairman-CEO Sardar Biglari in a release announcing the freeze, “Steak ‘n Shake has an extremely strong value proposition that resonates with customers. Throughout all of 2016, we have no intention of raising menu prices. To celebrate the menu price freeze, we will happily give away free milkshakes. We operate Steak n Shake on a simple principle: If we take care of our customers, our customers will take care of us.”
Steak ‘n Shake’s menu includes an array of Steakburgers, specialty burgers (such as the new $4.99 Sriracha Steakburger, shown above), $4 burgers and 99¢ Steakburger Shooter mini burgers.
In November, I wrote, “circle the end of January 2016 on the calendar because [Jack in the Box] says it will be coming big and strong with new and improved menu items.” Well, the promised menu blitz begins this Thursday.
That’s when Jack in the Box says it will introduce its new Double Jack double-patty burger. In November, I noted that this burger was in test. Now it will be the first of what should be several new items in the “better burger” menu lineup that Jack began overhauling a year ago with the Buttery Jack burgers.