• by Teresa Buyikian , February 21, 2024

As Shake Shack recently reported its Q4 2023 numbers, you’d be hard pressed to argue with the chain’s success. The burger and shake company experienced a 24% year-over-year systemwide sales increase to a record $1.7 billion. Eight-five new locations were opened, to total 518 Shake Shacks across the globe.

Foot traffic was equally impressive in Q4, finishing out the year with a 24.3% YOY traffic jump in December 2023, according to a recent report by Placer.ai.

Many factors contributed to the company’s success, but it has leaned more heavily on menu innovations, promotions and licensed entertainment collaborations than on traditional advertising. The addition of the Korean Style Chicken Sandwich and Korean BBQ Burger caters to trending customer tastes, alongside the classic burger and shake offerings. It’s also been pumping up its customer experiences, opening the Love Shack for Valentine’s Day meals.

With the recent promotion of Shake Shack’s Michael Kark to the expanded role of president of global licensing, the company has said it will focus on more integrations with licensed properties.

“Shake Shack's brand partnerships and LTOs have been key to driving visits,” commented Placer.ai Head of Analytical Research R.J. Hottovy to QSR Insider. “Following the pandemic, many chains have been slow to introduce new products or partnerships because of the need to keep operations streamlined. However, we've consistently seen that consumers are responding to new promotions, with chains like Shake Shack often seeing visit trends for these LTOs exceed pre-pandemic levels.”

On the chain’s ad spend and marketing looking forward, Shake Shack CEO Randy Garutti said on last week’s earnings call, “Our advertising spend at roughly 1% of sales is a fraction of many of our peers. We know we can and will invest with success here moving forward. As we've improved our overall profitability and increased our scale, we are able to unlock additional funds for advertising this year and will do so with data driven discipline.”

Garutti, who is set to retire this year while the chain is mid-search for his replacement, continued, “We’re not big enough yet to capture the kind of scale—we’d love to have a Super Bowl commercial someday, right? We’re just not there yet, but there will be a day where that can happen. We've got a test-and-learn into the strategies that we are getting a strong return on.”