Shake Shack Sales Hurt by Exclusive Grubhub Partnership
By Travis Riffe • November 7, 2019
Shake Shack’s new partnership with Grubhub dragged down third-quarter sales for the New York City-based fast-casual brand. Shake Shack, whose shares tumbled nearly 20% on Tuesday, recently transitioned to an exclusive delivery and marketing partnership with Grubhub. Analysts questioned why the company has opted to have an exclusive relationship with Grubhub at a time when other chains are working with multiple third-party delivery operators to expand reach. CEO Randy Garutti said the company went with Grubhub for a variety of reasons: It is less complicated on stores to work with one delivery operator; the long-term economics tied to commission fees are projected to be better; and, most importantly, Grubhub has agreed to share customer data, which delivery companies often hold hostage.