Shake Shack Is Closing 9 Struggling Restaurants In 3 States
Shake Shack has been expanding at a breakneck speed in 2024, with ambitious plans to open around 80 new restaurants during the course of the year. But even as the high-quality burger chain grows its footprint, some existing Shake Shack locations are closing their doors for good.
In a recent filing with the U.S. Securities and Exchange Commission (SEC), Shake Shack unveiled plans to shutter nine struggling restaurants across three states, according to Restaurant Business. The chain said the decision to close the stores came after a periodic review of its company-owned restaurants. Changes in the trade area around the locations and, in some cases, competition from other nearby Shake Shake restaurants were blamed for their underperformance.
"These Shacks are not projected to provide acceptable returns in the foreseeable future," the filing said.
Shake Shack expects the restaurants to close their doors by Sept. 25. Here are all the markets that will be impacted by the closures: Oakland, Calif.; Bunker Hill in downtown Los Angeles; downtown Culver City in Los Angeles; Koreatown in Los Angeles; Silverlake in Los Angeles; Westfield Topanga in Woodland Hills, Calif.; Polaris, Ohio; the Houston Galleria in Texas; and Montrose, Texas.
A spokesperson told Restaurant Business that this is the first time Shake Shack has shuttered restaurants for reasons unrelated to construction. Management and hourly workers at the closing locations will have the opportunity to be rehired at other restaurants, while those who opt not to transfer will be eligible for 60 days of pay.
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Shack Shack believes eliminating the underperforming locations from its portfolio will set the company up for longer-term success. The chain reported a 4% increase in same-store sales in the latest quarter, but saw a 0.8% decrease in customer traffic.
"Shake Shack is in a period of considerable growth with a plan to open 40 new company-owned Shacks and 40 more licensed Shacks this year," Shake Shack CEO Rob Lynch said in a statement shared with Eat This, Not That! "We're committed to sustainable growth and providing the best possible experience for our guests. After careful consideration, we've made the tough decision to close a small group of Shacks due to various factors, including underperformance. We remain focused on supporting our team members through this transition and look forward to continuing our growth, opening many more locations across the country."
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