OPERATIONS
SHAKE SHACK REINVENTS THE LABOR DEPLOYMENT MODEL
PHOTO: SHUTTERSTOCK
THE BURGER CHAIN JOINS A GROWING NUMBER OF FAST-CASUAL CHAINS USING AI-DRIVEN TECHNOLOGY TO BETTER MANAGE STAFFING.
BY LISA JENNINGS
S hake Shack is moving to a bespoke labor deployment model that CEO Rob Lynch said could be a game changer. In fact, the fast-casual burger chain joins a number of peers making similar moves toward using AI-driven technology to more accurately predict the team members needed in each restaurant and when to deploy them. The CEOs of Chipotle, Sweetgreen and Cava in recent months have all described using sim- ilar types of technology as they look to improve profitability at a time when macroeconomic pressures are keeping a lid on menu price in- creases.
In a presentation at the Goldman Sachs Global Retailing Conference on Wednesday, Shake Shack’s rela- tively new CEO Rob Lynch outlined the various opportunities the brand has to grow sales, including creating a new loyalty program, streamlin- ing operations, and lowering build- out costs, which he outlined at the chain’s second quarter earnings last month. That’s all low-hanging fruit, said Lynch. But he and CFO Ka- tie Fogertey said the new labor model—which is unique to Shake Shack—will also be fundamental in improving throughput and creating a better experience for guests. Traditionally, Shake Shack units used sales to determine staffing lev- els at each restaurant, Lynch said. “It used to have $1 million in sales equals this amount in labor, and GMs were deploying it how-
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RESTAURANT BUSINESS OCTOBER 2024
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