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Subject- Retail Management

Topic- Inside the mind of Shake Shack’s Founder
Group no. - 7
Group Members
Name Roll no.
Umesh Tiwari 20202127
Tejal Shenvi 20202047
Faizan Kaysingwala 20202118
Tanmay Potphode 20202036
Vicky Kumar 20202056
Mohit Goel 20202123

Danny Meyer
Daniel Meyer (born March 14, 1958) is a New York City restaurateur
and the Chief Executive Officer of the Union Square Hospitality
Group (USHG). Meyer was born and raised in a reform Jewish
family in St. Louis, where he attended John Burroughs School.
Meyer and USHG have won 28 James Beard Foundation Awards.
Meyer is the Chief Executive Officer (CEO) of Union Square
Hospitality Group and the founder of Shake Shack.

Union Square Hospitality Group

Union Square Hospitality Group (USHG) has created some of New York’s most beloved
restaurants, cafes, and bars, which offer outstanding food delivered with their signature warmth
and hospitality.
Founded by CEO Danny Meyer with the opening of Union Square
Cafe in 1985, the company now extends beyond the walls of its
eateries. In addition to creating Shake Shack, USHG offers
operational consulting, runs a multifaceted catering and events
business, Union Square Events, and a growth fund, Enlightened
Hospitality Investments (EHI).
With operations in New York, Washington, D.C., and beyond, USHG
has long supported its communities through hunger relief and civic
organizations. USHG holds 28 James Beard Awards and numerous accolades for its distinctive
style of hospitality.
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 Facts

Till 2016, Union Square Hospitality Group has added lots of things in their bag like Gramercy
Tavern, the Modern at the Museum of Modern Art (MoMA), the classy-casual barbecue joint
Blue Smoke, the fast-growing Shake Shack, which started as a hot dog stand in New York City’s
Madison Square Park like this they have started lots of restaurant which are located in more than
90 locations worldwide. Danny Meyer was a special guest at the 2016 Convenience Store News
Foodservice Summit which was held on 15 March 2016. So there he addressed lots of
foodservice retail executives and chefs gathered.
So in that summit Meyer said he loves to travel around the world so he can devour different
types of food and in that his best taste was at a gas station in Uruguay. Meyer started Shake
Shack as a hot dog cart outside Madison Square Park and with lots of effort the single food stand
became extremely successful. With bringing new foods in his menu he expanded shake shack in
different locations of New York. Not only he is expanding his stores but also its menu like
chicken sandwich which was a great hit. His first business book, Setting the Table (Harper
Collins, 2006), was a New York Times bestseller which consist of hospitality that should be
given in a restaurant. In 2015 Meyer introduced a policy which was “no tipping “and he
implanted in all his stores. He introduced this policy because there were staff who were not
getting any tips and in that also at that time there was a labor crisis going on and such
discrimination going on, so basically he wanted to stop this and main problem was that his
talented chefs were becoming servers so they could get tipped so to stop all this he increased
their pay and also prices of menu which was called “Hospitality included”. So with this decision
a proper justice was given to all staff
Meyer hires people based on their emotional skills. He gives his staff training on 6 different
skills which are Kindness & Optimism,
Curiosity, and Work Ethics, Empathy,
Self-awareness and Integrity. So at last he
told his foodservice executives that “You
guys are on the right track with
foodservice, and people are not going to
go back to accepting lower-quality food
at a gas station.”

 Issue
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Danny Meyer started Shake Shack and little by little he added more items in his menu and in a
few years he expanded his business all over the world. According to him serving the customer
with proper and warm hospitality is the most essential thing in the restaurant business. For this
he gives his employees a proper training for it so that they can improve their emotional skills.
His restaurants are famous for their world class service. He wants to serve best food quality in all
of his restaurant.
In this case study, they have mentioned a policy called “No tipping” policy so according to this
policy none of the customer can tip to any staff no matter how great they serve. This policy was
implemented because not every tip given is same and there are also staff who are not able to get
any tip. Due to this, there was a discrimination going on and it lead to the drop in motivation as
well as enthusiasm in the staff who do not receive tip. Currently there was also a labor crisis
going on for increase in their wages so Meyer noticed that his talented chefs were becoming a
servers so that they can earn more so to stop all this Meyer decided that there will be no tipping
in all over his restaurant and on behalf of tipping he increased everyone wages and those extra
wages were added in the customer bill as hospitality included but because of this decision there
were customer and staff who were not happy.

Question and Answers

Q1. Based on the information presented in this case, how would you describe
Shake Shake’s retail image?
Ans.
Based on the information presented in the given case, Shake Shack’s retail image can be
described as ‘Standing For Something Good in all aspects of business’ which also serves as their
vision:
The following could be consider as a description of its retail image:
1. Customers view Shake Shack as a symbol of dedication to quality and customer service.
Since Shake Shack hardly spends any money on marketing instead focuses on the quality
of food for its customers.
2. Shake Shack even disposed the regular notion that fast food had to be precooked or even
prepared quickly in favor of quality ingredients and customer experience. They created
an image that they care for their customer’s health.
3. Shake Shack’s customers are also fond of the regional specialties the brand offers people
according to its store’s location adding a touch of culture to its menu.
4. Unlike the workers at most fast-food outlets, Shakes Shack’s employees give the
impression that they truly like their customers which makes the atmosphere customer
friendly, giving a good satisfactory feeling to the customer.
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5. One of the retail image that Shake Shack has is the long queue in which people await for
hours and hours. People are ready to wait and consume something better rather than
something quick but unhealthy.
6. Food safety is a top priority, the chain has rigorous quality assurance and food safety
protocols in place throughout the supply chain. It includes keeping a comprehensive
supplier and ingredient selection process and maintaining a limited list of approved
suppliers.
All the above points can be summarized to the fact that Shake Shack has a customer oriented
image and hence it relates extremely well with its customers compared to other food chains.

Q2. How would you describe the store atmosphere that Shake Shack seeks to
maintain?
Ans.
The owner of Shake Shack, Danny Meyer observed the fact that people are drawn more towards high
quality food, instead of a certain painting on the wall, or luxurious décor.
This observation paved the way in blending nutritious food with simple décor, which has attracted the
customers to their outlets. At times, hundreds of people have stood in the queue to get the food from
Shake Shack. Also, Danny Meyer introduced 20% of food menu to be localized according to the
geographical location, hence providing what the local people demand for, which creates a favorable
atmosphere for the business to prosper in.
Also, their menu is sober, which attracts maximum crowd, as not all are in awe of fancy food like the
ones offered in luxury restaurants.

Q3. The Grammercy Tavern is more upscale than Shake Shack. Explain how
you would expect its retail strategy to differ.
Ans.

1. Gramercy Tavern is a New American restaurant located at 42 East 20th Street (between
Broadway and Park Avenue S.), in the Flatiron District in Manhattan, New York City. It
is owned by Danny Meyer, along with Chef/Partner Michael Anthony. The pastry chef is
Miro Uskoković. The Beverage Director is Chris Raftery. The restaurant opened in July
1994.
2. Shake Shack is an American fast casual restaurant chain based in New York City. It
started out as a hot dog cart inside Madison Square Park in 2001, and its popularity
steadily grew. In 2004, it moved to a stand within the park, expanding its menu from
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New York style hotdogs to one with hamburgers, hotdogs, fries and its namesake
milkshakes.
3. Difference between Gramercy Tavern and Shake Shack is that Gramercy Tavern is a
proper restaurant where one gets a starter then main course and at last desserts with a
proper service and shake shack is a fast casual restaurant where one will be served fast
food such as burger, hot dog, etc. with casual a service and here one get home delivery of
food also. The second difference between the two is that in Gramercy Tavern everything
will be served to you on your table and in Shake Shack you have to go and collect your
food and the ambience at both the places is totally different. The third difference is that in
Gramercy, one will get offers mostly on some occasion and in Shake Shack one will get
to see offers daily as Shake Shack has many competitors. In Shake Shack you can order
food online but for Gramercy this option is not available. So these are the differences
between their strategies and because of Gramercy’s service, ambience, food, a proper
dining hall, first one has to reserve a table. Thus, Gramercy is a lot more expensive than
Shake Shack.

Q4. From a retail positioning point of view, what are the pros and cons of this
statement: “Twenty percent of the menu at every Shake Shack unit is
localized; and none of the units look the same?”
Ans.

1. The pros of the sentence are that Meyer wanted all of his stores to be unique in their
sense, in every location people have something they like to eat so give them that food so
that they can be satisfied. Meyer also said that he is proud that is stores are a chain but it
is not necessary that every link in the chain has to be the same which means not every
store menu has to be same. Each Shake Shack unit also carries a wide selection of craft
beers local to that particular area. So, basically he wanted an advantage in his every store
that they can have either their localized food or their original Shake Shack food or they
can have both also.
2. The cons of the statement are that the customers have already eaten localized food over
the years. If Shake Shack still wants to provide the customers with localized food then
they must provide some difference in taste. The customers expect the kind of food they
have never eaten. Thus, the food provided must be more unique than providing localized
dishes.

Q5 As a restaurant patron, what would you think of a strategy that permits no

tipping of the wait staff? As a member of wait staff, what would you think?
Ans.
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1. As a restaurant patron, this policy of no tipping should be implemented because, no doubt

waiters who receive tips work better but the ones who are trained to work as chefs in the
kitchen also choose to work as a waiter because they cannot receive tips while working as a
chef. This leads to under utilization of their talents. If the no tipping policy is implemented
then the staff which do the job for which they have received formal training and thus they
will be able to do the job of their choice. They will perform better since they will be doing
what they love.
2. As a member of wait staff, the tipping policy should be there. The hard work and good
hospitality provided by the servers make the customers feel delighted and pampered. So, it
is their right to receive tips whether it be a small tip of $1 or $5 for that matter. The
customer gives a tip when he is happy with the server’s delivery of serving hygienic food.
Wait staff is more hospitable when they get tips after their service to the customers and they
feel more satisfied when they get their salary plus tips. And if they continue to provide their
best hospitality service even the brand image of restaurant rises and also, they are marketed
with word of mouth of customers. So, as a server, the no tipping policy shouldn’t be there.

Q6. Develop a five-point promotion mix plan for Shake Shack. Which factors
would you include? Exclude? Why?
Ans.

Effective promotion is an essential part of every successful business, yet it is an

ongoing struggle for many companies. Using the right promotional mix elements in
your marketing strategy helps your company drive sales, weather slowdowns, and
stand out in a crowded market.
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Factors to be included are:

1. Advertising: Advertising is an excellent medium to broadcast the presence of the brand
nationally, which will create a position in the minds of the prospective customers, also
(Out- of- Home) OOH advertising near the franchises helps.
2. Public Relation: As the firm is making its presence known globally, maintaining cordial
relations with customers is a must which can be done with help of an able PR team.
3. Sales Promotions: Giving group discounts, accepting party orders, loyalty schemes,
customer testimonials help every kind of business.
Factors that can be excluded are:
1. Personal Selling- Since this is a restaurant business, personal selling can be avoided, and
instead celebrity testimonials and spreading positive word of mouth will be a better
option.
2. Direct Marketing- Hoteling industry need not call up customers or spam their mailboxes
as their industry is detrimental to quality of service offered.

Q7. Visit the Shake Shack website (www.shakeshack.com) where should this
site fit in the chain of overall promotion mix? What function does it perform?
Ans.
The marketing mix is a model of creating and implementing marketing strategies. The
elements are the marketing tactics, also known as the “four P’s”, the marketing mix
elements are product, price, place and promotion.
1. Product:
a) Shake Shack uses only the best ingredients for its burgers, hot dogs, fries and
custards. Burgers and hot dogs are made from all-natural, hormone and antibiotic-
free beef and chicken, while fries are made from premium golden potatoes and are
prepared 100% free of artificial trans-fat. Frozen custards use only real sugar, no
corn syrup, and milk without artificial growth hormones, and are spun daily on
site. Each shack is localized with design and menu options that are intended to
pique the interest of local guests.
b) The company is also dedicated to using sustainable materials and equipments for
e.g. using handmade tabletops constructed from reclaimed bowling alleys. They
also posts information about suppliers, sustainable sourcing and community
relationships.
2. Price:
Price range is $5 and not more than $10 for an item. It is a “dining on a budget when
thinking of the great value of the food” kind of pricing.
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3. Place:
Shake Shack is located in more than 90 locations in the US mostly in parks and
outdoor areas also it has internationally opened 12 other casual restaurants in
Istanbul, Dubai, London, Moscow etc.
4. Promotion:
1. There are variety of different promotions of new flavors of the month or seasons.
2. Free food items from the menu for the birthday celebration.
3. Serving as sales promotion method which makes customer save money by getting
coupons easily and very simple, with this method they can have deals up to 50%
discounts and buy Shake Shack burger with a cheap price on $2.
4. Donating for a lot of communities.

 Conclusion
Through this case study, Danny Meyer has said that “People want the highest quality
food, but they don’t want the fancy experience anymore”. Everyone loves to eat good
quality food, they don’t focus on your decoration they focus on your taste. They get
inspired by your hospitality so that they can come again and again. Bring something new
in your product, expand your business, and learn from your competitors. Go travel around
the world and see what the different types of food are as well as how they serve their
customers. Always keep your employees happy because they are the one who serves the
customers. If the restaurants are giving good quality food, nice ambience, warm
hospitality then they don’t have to worry about their customer retaining because that is
what the customer expects from you.