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Automation is ‘incredibly important’ for Shake Shack, says founder Danny Meyer

Automation has come for just about every hallmark of Americana: Cars, ballot boxes, and now even fast food — at least for one fast-growing burger chain. In a new interview, restaurateur and Shake Shack (SHAK) founder Danny Meyer said automation has transformed the company’s stores.

“Technology has been incredibly important for Shake Shack,” Meyer says. “Shake Shack is actually accelerating its growth even over 2018, which was a big year.”

Since the outset of 2019, the stock has leapt more than 62%. In the first quarter of this year, the company’s earnings jumped 116% when compared with the last quarter of 2018. Founded in 2004, Shake Shack has about 220 locations worldwide, which helped the company generate $459.3 million in total revenue last year.

Citing changes at the company’s stores, Meyer pointed to an app that allows customers to order before they arrive, as well as digital in-store ordering kiosks if they haven’t.

“The app has made it very, very possible for people who don't either have time or interest in waiting in line to order ahead, pay ahead, and just come to the shack and your meal is ready,” says Meyer, CEO of the Union Square Hospitality Group, a company that owns 20 fine-dining restaurants and cafes.

“Increasingly, in Shake Shacks, you'll also see an ordering kiosk which gives you the opportunity to have a flawless ordering experience plus extra hospitality,” he adds. “Because what that means is that the very people who are there to welcome you, and hopefully recognize the fact that you've been a regular for some period of time, are thinking 100% about hospitality.”

Meyer made the comments to Yahoo Finance Editor-in-Chief Andy Serwer in a conversation that aired on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

Restaurateur and Shake Shack founder Danny Meyer appears on Influencers with Andy Serwer.

‘The greatest export that our industry has ever had: fast food’

Shake Shack is not the only fast-food chain undergoing a tech-enhanced facelift. In 2017, McDonald’s (MCD) kicked off the store renovation initiative it calls Experience of the Future, which includes digital kiosks. The company plans to update all U.S. locations by the end of 2022. Similar store improvements are underway at Wendy’s (WEN) and Burger King, a property of Restaurant Brands International (QSR).

Drawing on his background in fine dining, Meyer describes Shake Shack as “fine casual.”

PALO ALTO, CA - DECEMBER 12: A kiosk at Shake Shack at the Stanford Shopping Center in Palo Alto, Calif., on Wednesday, Dec. 12, 2018. (Nhat V. Meyer/Digital First Media/The Mercury News via Getty Images)

“If you go back in history to the greatest export that our industry has ever had, fast food, what it basically did was solve a big problem for people,” he says. “How can you eat as many calories as quickly and as inexpensively as possible?”

“What Shake Shack, and now many others, are contributing to that,” he adds. “What if you had a baby and the mother was a fine dining kind of background where you think a little bit differently about ingredients?”

Just as Shake Shack is not the only fast-food chain to embrace technology, it is also not the only chain to tout high-quality ingredients. Other chains like Chipotle (CMG), Five Guys, and Panera also market themselves as being a step above traditional fast-food joints like Burger King and McDonald’s.

Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.

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