Nearly a year after its announcement, the state’s first Shake Shack is due to open in Baltimore’s Inner Harbor this month.
Early Monday afternoon, the burger restaurant looked all but open, lights on and employees apparently in the middle of a training session. Some would-be diners wandered up to the glass only to be met with tantalizing “Opening Soon” signs.
Shake Shack will be the first of several new restaurant and retail offerings to open at the 400 East Pratt Street building expansion. A Chick-fil-A, CVS and local salad-and-sandwich chain Nalley Fresh are also planned for the 22,000 square feet of new space.
The renovation, ongoing since the summer of 2013, is part of a broader revitalization of Pratt Street, designed decades ago as a pedestrian-unfriendly highway connector, said Mike Evitts, spokesperson for the Downtown Partnership of Baltimore.
Shake Shack is a popular brand that has major name recognition in the regional market, Evitts said, and the restaurant will be able to capitalize on the high pedestrian count in the surrounding blocks – about 122,000 employees and 41,000 residents within a mile.
“It is about tourists, but it’s not exclusively about tourists,” he said. “It’s about people living and working there and wanting a diverse range of places to go every day.”
The burger joint got its start as a hot-dog cart in New York City’s Madison Square Park in 2001, established by Danny Meyer’s Union Square Hospitality Group, LLC. The first Shake Shack as diners know it now – with its crinkle-cut fries, frozen custard, ShackSauce-topped Shackburger, and even Shack-label wine and beer — opened in 2004.
Shake Shack now operates 63 locations in nine countries, including 35 in the U.S., with four in Washington, D.C., one in Virginia and three in Pennsylvania.
Shake Shack is riding the fast-casual dining wave, along with that of its buzzy initial public offering at the end of last month. The company went public on Jan. 30 at $21 per share, trading on the New York Stock Exchange under the ticker symbol “SHAK.” The IPO of 5,750,000 shares of its Class A common stock closed Feb. 4. Shake Shack reported that it reaped about $112.3 million in proceeds.
Shake Shack shares closed Monday at $41.50. From 2010 to 2013, total Shack revenues grew from $19.5 million to $82.5 million, and its net income grew from $0.2 million to $5.4 million.
Fellow fast-casual restaurant Chipotle has seen sharp growth since its initial public offering in 2006. In 2005, the company’s approximately 500 restaurants raked in revenues of $627.7 million. At the end of 2013, Chipotle Mexican Grill, Inc. was operating 1,595 restaurants and brought in $3.21 billion in revenue. Its stock, which traded at $45 per share when it went public in January 2006, closed Monday at $648.01 per share.
According to the National Restaurant Association, quick-service and fast-casual restaurant sales are projected to top $201 billion and grow by 4.3 percent this year, beating out the overall industry sales growth rate of 3.8 percent.
“As the American palate continues to evolve, fast-casual restaurants often highlight build-your-own menus, using fresh ingredients, which fits into the wider trend of consumers seeking unique dining experiences along with convenience and affordability,” wrote Annika Stensson, the association’s director of research communications, in an email.
Indeed, Shake Shack’s menu offerings reflect loftier aspirations than your typical fast-food fare.
There’s a vegetarian “’Shroom Burger,” offers to accommodate the gluten-free set, and sells proprietary dog biscuits that can be tucked into a doggy sundae of vanilla custard and peanut butter sauce. And in its IPO filing with the U.S. Securities and Exchange Commission in December, it boasts of sourcing “premium, sustainable ingredients,” including hormone- and antibiotic-free beef.
In that filing, the Shack eschewed even the “fast casual” label, reaching for something a bit higher by referring to itself as “fine casual.”
“We believe that many consumers want to associate with brands whose ethos matches that of their own,” the company said.