NewsShake Shack, fast food, US fast food, Shake shack price, Minimum Wage
Nov 12, 2015 10:55 PM EST
One of the US fastest growing fast food chains, Shake Shack announces that the company will increase its menu prices again by 2016.
The announcement was made by the company's CEO, Rany Garutti to investors citing that it is preparing for a minimum wage hike by next year.
Shake Shack which had increased its price by 3 percent before this in September 2014 and January 2015 due to a higher cost of commodities according to Buzzfeed.
Garutti said that it is still unclear on how many price increment will be put on its menu, but he stress out that it will be just a single-digit percentage. However, with current wage set by Shake Shack which is already higher than minimum wage it is high likely that the increase will not burden the customer.
The minimum wage has been a big problem for fast food industries as more workers and union demanding higher payment each year due to the increase in the cost of living.
According to Shake Shack chief financial officer Jeff Uttz, "Minimum wages continue to increase and we continue to compensate our teams above those minimums. We intend to continue to offer competitive compensation packages and career development opportunities in order to attract the best talent and to take care of our team for the long-term."
According to the Business Insider, currently its hourly minimum wage is $10 per hour and in some cities, it even pays higher than the minimum wage. For an instant, in Washington DC the minimum wage is $10.50 but the company pays $12 an hour to its worker. While in Texas, Shake Shack pays $11 an hour compared to the state minimum wage of $7.25.
According to Garutti, the high payment is to make sure that the company will get the best people for its business. He said that "We're willing to take a little bit of a hit on the labor line to get the right people, pay people right"
The company had also reported a higher than expectation earnings for the third-quarter.
According to CNBC, analysts expected that its earnings per share will be 7 cents with $47 million in revenue. However, the company reported earnings of 12 cents per share with revenue of $53.3 million.
Garutti said that Shake Shacks biggest selling product is its ChickenShack and is increasingly popular in Brooklyn restaurant. The chain which is first open in 2004 in the New York City now has 46 outlets in 12 states in the US.