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Shake Shack to Offer New Store Model in Post-COVID-19 World

By Rich Duprey – May 6, 2020 at 10:39AM

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A design borne of necessity will become standard in the future.

Shake Shack (SHAK -0.77%) is preparing for a world after COVID-19 where social distancing remains a key consideration for consumers. 

The fast-casual burger chain will be introducing a new store design that incorporates the concept by modifying the restaurant's exterior to include drive-thru and walk-up windows to better enable contactless order pickup. It's calling them "Shack Track" stores.

Shake Shack employee serving a burger

Image source: Shake Shack.

Doing business from a distance

Although carryout has always been part of Shake Shake's business model, the onset of the coronavirus pandemic forced the company to adopt a to-go-only model in mid-March. Delivery through third-party providers was also available while a number of locations were shut down completely, though most of those were at airports and in shopping malls.

However, in early April, Shake Shack banned all entry into its restaurants and instituted curbside pickup. Customers ordered their meals on the company app and pulled up alongside a tent or table to pick up their orders.

Now Shake Shack is looking to punch holes through the walls of its restaurants to allow for drive-thru or walk-up windows.

CEO Randy Garutti told analysts the world will eventually gather together again one day, but not right away, and the chain needs to prepare for how customers will approach dining out.

"This will be tough," he said. "Shake Shacks are crowded places. We're going to be working carefully to disperse those crowds while still trying to maintain the best we can."

He said it was Shake Shack's technology investments beforehand, such as the development of its ordering app, that "very literally" kept the restaurant chain alive during the crisis.

While new stores that open will be built with these design modifications in mind, even older ones that weren't intended for drive-thru will begin seeing lanes added.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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