When fine-dining operator Union Square Hospitality Group opened Shake Shack in New York City’s Madison Square Park, no one expected a hit.
The outdoor burger joint was developed as part of the revitalization of the area, says David Swinghamer, president of USHG’s growth business division. The hope from the outset was that it would break even.
“Never had we thought it would be this wildly successful,” he says.
Shake Shack debuted in the spring of 2004 and soon drew lines so long that USHG later installed a live webcam so people could check out the scene before they staked out a place in line. Now, what was once just a neighborhood project has grown into an expansion opportunity for USHG, which also plans to grow its Blue Smoke barbecue concept. The second Shake Shack opened last fall in New York’s Upper West Side neighborhood, and a third is set to debut this spring at Citi Field, the new home of the New York Mets baseball team.
USHG, which was founded by renowned restaurateur Danny Meyer, isn’t the only upscale operator to ditch filet mignon and fine wine to take a shot at burgers and milk shakes. Laurent Tourondel, another New York-based chef with such fine-dining restaurants as BLT Steak and BLT Prime, last July expanded his BLT Burger restaurant with an outpost in Las Vegas. And unlike USHG, celebrity chef Bobby Flay already had national expansion in mind when he debuted Bobby’s Burger Palace in suburban Lake Grove, N.Y., last summer. A second one has already opened in Eatontown, N.J., and another unit is planned for this year at the Mohegan Sun casino-resort in Connecticut.
The popularity of the burger is indisputable—Flay’s partner Laurence Kretchmer has called it the “great American sandwich”—and the size and scale of operations also make burger joints a good growth vehicle for chefs looking to expand into new areas.
“This has a lot to do with our desire to get our product out to a lot more people,” Kretchmer told NRN last summer after the first Burger Palace opened. “A very small percentage of the dining public gets to eat at the Mesa Grill, one of Kretchmer and Flay’s upscale restaurant concepts. We want to broaden our geographical accessibility while creating a more accessible price point.”
Swinghamer says Shake Shack’s size and streamlined operations make the concept easier to reproduce in another locale than USHG’s more upscale restaurants, like Union Square Café or Gramercy Tavern. “Shake Shack, size-wise, is smaller than a number of our fine-dining restaurants,” he says. “We can better control the quality and consistency and our renowned level of hospitality more easily than in a fine-dining restaurant.”
As chefs make a foray into fast casual, they don’t seem to skimp on quality. BLT Burger and Bobby’s Burger Palace both use certified Angus beef in their sandwiches. Shake Shack also boasts a menu of high-quality fare, says USHG’s Swinghamer. The prices reflect the finer ingredients: BLT Burger offers burgers in the $9 to $17 range; Bobby’s Burger Palace’s burgers are priced between $6.50 and $7.50; and Shake Shack’s sandwiches range between $3.75 and $9.50.
