Shake Shack is a beloved fast-food chain known for its burgers and shakes.
With its emphasis on a higher quality of food than other fast-food chains, many people love to stop at Shake Shack for lunch and dinner.
However, like many other restaurants, Shake Shack has had to raise its prices in recent years.
Some might consider the prices of the items on their menu to be too high for the type of food that you receive.
If you’re wondering why Shake Shack is so expensive, here are 10 reasons to explain their recent price increase.
Why Is Shake Shack So Expensive? (Top 10 Reasons)
1. Costly Food Ingredients
Shake Shack can’t operate if it can’t purchase ingredients to make its food.
The problem with ingredients is that they’ve increased in price over the past few years.
Several factors impact the availability and pricing of crops.
In particular, the COVID-19 pandemic played a key role in driving up the price of food ingredients.
Many farms had to reduce their labor or shut down entirely.
That meant lower crop yields.
There were fewer people to plant and harvest.
With smaller yields, there are fewer crops to go around.
Since farmers work with several different businesses in the area, each business could only receive a certain number of ingredients from their minimal yield.
That also means they could make fewer menu items.
To try and make their food last, they had to increase the price of their food to lower the demand for it.
Farmers also felt the impact of COVID-19.
With many restaurants and markets closed, they had no one to sell their products to.
The financial assistance that rolled out to aid farmers primarily went to large farming corporations rather than small farms.
With a lack of funds, many farmers had to close up shop.
That resulted in fewer crops to go around which only further makes the supply problem worse.
Some farms are also suffering from climate change.
The shift in temperatures has impacted which crops grow well.
All of these factors have influenced the price of ingredients.
Since ingredients are more expensive to buy, Shake Shack has to take on a higher cost.
To stay afloat, they need to increase the price of their food.
This ensures that they keep making a profit and keep running the business.
Shake Shack is expensive because the cost of ingredients is expensive.
2. Shipping Bottlenecks
Another reason Shake Shack is expensive is shipping bottlenecks.
While the COVID-19 pandemic is partly to blame, problems with the global supply chain existed before the pandemic even started.
Since logistics and supply chains are mostly privately owned, data sharing is minimal.
That means everyone is doing their own thing and there’s little communication between various carriers.
It also means that if one carrier had a late shipment, then it could impact the others.
If a ship was late, then that means the truck scheduled to pick up the container needed rescheduling.
That also means the cargo then needed a warehouse since they’d need to find another truck later.
The delay in shipment then impacts everyone waiting for that delivery.
It becomes a snowball of problems that affects everyone in that specific supply chain as well as those around it.
Once COVID-19 hit, the problem became even worse.
At first, no one was buying anything besides food because they weren’t sure how long they’d be working at home.
They also weren’t sure about their financial status.
When the pandemic lengthened, buyers started to buy commodities rather than trips and vacations since they were unable to travel anywhere.
An increase in buying stuff, particularly from China, during a time where Chinese factories were still mostly closed created a problem from the start.
Some Chinese factories still aren’t working at maximum capacity.
Those that are in full operation are trying to meet the demand for their commodities.
Since some are pumping out a lot of goods, they need more ships to deliver those goods to the shores of the United States.
There aren’t that many ships because the underlying infrastructure for the ships didn’t exist.
The ships are old and falling apart.
Containers are old and falling apart.
Those that do operate are in high demand.
There’s also the problem with the dock workers.
Truck drivers are working nonstop to alleviate the bottleneck.
Crane operators have had their hours increased to alleviate the bottleneck.
With more goods arriving at the port, it’s difficult to make any kind of dent in the backlog.
This impacts the price of goods because the bottleneck adds expenses to the supply chain.
More people and more labor add to the mix which costs money.
That puts a higher price on the goods since it needs to cover shipping costs.
Since it costs more to buy their food and goods, Shake Shack has to increase its prices.
Shake Shack is expensive because of the global supply bottleneck.
3. Supply Chain Disruptions
Shake Shack also had to raise its prices due to supply chain disruptions.
While every business faces supply disruptions from time to time, they have never been more tested than during the pandemic.
Whether it’s disruptions through labor shortages, closed business partners, or delays in shipping, each factor can impact the price of the menu.
Labor shortages can cause disruptions in the supply chain by having fewer delivery drivers.
When there are fewer drivers, then there are fewer trucks that can go out with ingredients and goods.
With fewer deliveries, the price of those items increases.
Shake Shack works with various businesses for deliveries, ingredients, and other goods.
When one of those businesses closes down because of sick employees or because they’re forced to, then that also impacts Shake Shack.
They’re unable to receive those items in bulk which means it becomes costlier to obtain those items.
That also increases their prices.
Finally, any delay in shipping also impacts their prices.
Shake Shack is expensive when its supply chain has a disruption.
4. Labor Shortages
An offshoot of the pandemic is a rise in the labor shortage.
Working at home and receiving stimulus checks opened the eyes of many workers in the world.
They realized that they don’t need to work exhausting jobs for low pay.
Since many saved their stimulus checks or used them to better their skills, they were able to quit their low-paying jobs and seek better employment elsewhere.
There’s also been a stand-off between restaurant workers and restaurants.
The American restaurant system relies on workers receiving their payments via tips.
This allows the restaurant to pay them minimal amounts of money.
Some only pay about $2 an hour, for example.
While some restaurants cater to diners with large pockets who tip well, most cater to middle-class families who can only tip the bare minimum.
Fast-food workers also receive minimal pay.
They’re lucky to receive the federal minimum wage rate at best.
Since these workers are also overworked and deal with unpleasant customers, it’s no surprise that they quit.
The labor shortage creates a problem for Shake Shack because it’s unable to operate or, at the very least, can only operate for a few hours.
Without people to work in their restaurants, the store can’t make any money.
Even if it has a minimal staff, it can only serve so many customers.
The entire process slows down.
Fast food restaurants rely on quick service to push as many customers through as possible.
With fewer workers, that process slows, and fewer customers receive service.
It might even frustrate some customers who then decide to go to a different restaurant.
Labor shortages in the restaurant industry aren’t the only thing impacting Shake Shack’s prices either.
Labor shortages in the trucking industry, factory industry, and farming industry all impact the prices of the restaurant.
All these shortages can snowball, too, which can make even more problems.
Shake Shack is expensive because of the massive labor shortages currently taking place in the United States.
5. Labor Costs
To keep their workers, many restaurants are finally raising their wages.
Some are even embracing living wages for their employees.
Shake Shack’s founder has even called for its restaurants to raise the wages of its employees to $15 an hour.
While that’s ideal for workers, it also means that they’re going to need to increase the prices of their food.
With higher operating costs come price increases.
Since it now costs Shake Shack more money to operate and stay alive in the market, they need revenue to fund those operations.
The only way they receive revenue is by selling food.
To ensure that their revenue stays at the same level, the food prices have to increase.
In return for higher food prices, customers can expect a happier workplace.
Employees who receive better pay are usually happier because of it and work harder to ensure they keep their jobs.
While you may not enjoy paying higher prices at Shake Shack, you’ll likely also have a better time at the restaurant.
Shake Shack is expensive because they want to pay their employees a living wage.
With living wages come price increases.
6. Price Of Meat
The price of meat is also impacting Shake Shack.
Since Shake Shack uses meat in many of its menu items, they’re reliant on stable meat prices.
Before the pandemic, meat was pretty cheap.
They could buy it in bulk without impacting their finances too much.
Since the pandemic, however, meat prices have soared.
Part of that is because there was a large demand for meat and little supply of it.
Since people were working at home, many of them relied on takeout.
Others were cooking at home for the first time.
That meant many people were looking to buy more meat.
However, cattle farms were experiencing labor shortages since many had to decrease the number of workers.
While farms were able to stay open since they’re an essential business, they also faced labor problems as workers became ill.
Some refused to work because they didn’t feel safe.
Problems on the farm meant a lack of meat production.
Labor problems in shipping also made the problem worse.
With supply problems and exceedingly high demand, the price of meat is high.
Meat prices today are still quite high.
This impacts the cost of operation for Shake Shack.
They have to spend more money to make their menu.
To ensure they’re still able to make a profit, they have to raise their prices.
Shake Shack is expensive because the price of meat is high.
7. Construction Costs
Shake Shack has seen a lot of success.
Because of that, they plan to open more restaurants in the future.
The high cost of construction is slowing the process.
It’s also part of the reason behind their price increases.
Construction materials have fluctuated between being extremely expensive and being cheap.
It all comes down to supply.
For a while, the price of lumber was extremely high.
That’s because many people were undertaking home improvement projects since they were stuck at home.
There wasn’t that much lumber coming into the stores since factories and logging companies weren’t operational.
This also meant that those who took on larger projects like building a new restaurant faced high prices.
Due to the high price of construction materials, a job that might normally be $100,000 could easily become $200,000 or $300,000 if the price of construction materials tripled.
Eager to grab what real estate they could while interest rates are cheap, Shake Shack has moved forward with some of its construction projects.
To cover those costs, they have raised their prices.
Shake Shack is expensive because they’re opening new businesses in a time when construction materials are expensive.
8. Rent Prices
Shake Shack has restaurants across the United States.
Some of its locations come with extremely high rental prices.
To rent a restaurant space in New York, for example, the average price is $125 per square foot.
Depending on how large the restaurant is, that monthly rental price can quickly become expensive.
It only increases the closer you are to tourist-heavy areas.
Some areas may see rent increases, too.
Since many landowners were unable to adjust rental prices or kick anyone out for missing payments because of the pandemic, they may be looking at raising prices.
Some landowners faced financial problems as well since they weren’t receiving payments from the people they rented living or professional spaces to.
To make up for their losses, they may increase the price of rent.
Rental prices also increase regularly as an area’s property taxes increase.
As rent increases, you can also expect Shake Shack’s prices to increase.
They need to raise prices to stay ahead of operational costs.
Shake Shack is expensive because some of their restaurants are in areas with high rental rates.
Inflation is another leading problem that’s increasing the price of everything.
Inflation occurs when the amount of money in a nation is higher than economic growth.
It forces everyone to raise their prices as a result.
You end up needing to pay more for an item than you did a few months ago.
This affects Shake Shack in several ways.
It affects the cost of food and goods that the restaurant needs.
It affects energy costs and rental prices.
With higher prices on everything, the cost of running the business also increases.
As a result, Shake Shack also has to increase its prices to stay afloat.
Shake Shack is expensive because of inflation.
10. High-Quality Ingredients
There are tons of burger joints in the United States.
To stand out from the rest, you need to have something special.
In Shake Shack’s case, it’s their emphasis on high-quality ingredients.
In particular, they focus on buying great meat.
They use Angus beef in their recipes and only ever use the muscle and not the trimmings like many other fast-food restaurants.
They also only buy Angus beef from farms that don’t use chemicals or hormones to grow their cows.
They only buy clean meat.
That makes the meat more expensive.
They do the same for their vegetables, preferring to serve only
organic vegetables or vegetables that aren’t GMO.
All these high-quality ingredients come at a higher price.
That’s because it costs more money to grow them in a cleaner, healthier, way.
Since their ingredients cost more, they have to charge more to make a profit.
Shake Shack is expensive because it uses high-quality ingredients in its menu.
How To Save Money At Shake Shack
While Shake Shack has high prices on its menu, there are a few ways that you can save money.
Here are some tips you can use to save money at Shake Shack.
1. Promo Codes And Coupons
Like many other fast-food restaurants, you can find various promo codes and coupons.
Some of them are online while others come in print with weekly ads that you receive in the mail.
These coupons usually allow you to buy certain menu items at a discounted price.
Some also give you the chance to buy one item and get another free.
Keep an eye on the coupons and promo codes to find a deal that appeals to you.
2. Student Discounts
Shake Shack also has a student discount for students.
If they have an Unidays account with Shake Shack, then they can buy one item and get one free.
If you’re a student or you know a student, then this is a great way to get extra food for free.
3. Loyalty Reward Program
You can also join their rewards program to earn discounts and free food.
Download the Shake Shack app and enter the necessary information to join their program.
Each time you buy from them, you’ll earn reward points.
Eventually, you can cash in on those points and earn yourself some heavily discounted food.
Shake Shack has a reputation for delivering high-quality food at a fast pace.
However, they’ve had to raise their prices over the past few years.
That’s made some of their menu items quite expensive.
The rising cost of ingredients and the problems with supply chains is primarily to blame.
You can find savings if you use coupons, qualify for their student discount, or join their loyalty rewards program.