Shake Shack closes nine locations in L.A. by month’s end

Shake Shack is set to close nine underperforming locations by the end of September, including five in the Los Angeles area, one in Oakland, and two in Texas, along with one in Ohio. The closures are attributed to these locations negatively impacting nearby stores by cannibalizing sales and not being projected to yield acceptable returns in the foreseeable future. This decision comes amid a challenging environment for restaurant chains, as consumer spending has decreased due to high inflation, leading to a 2% drop in customer traffic at fast-food restaurants in the first half of the year. Despite these challenges, Shake Shack has reported a revenue increase of 16.4% in the second quarter of 2024 compared to the previous year, with same-store sales up by 4%. The company remains optimistic about its growth trajectory, planning to open 40 new company-owned and 40 licensed locations this year. Employees affected by the closures were informed on August 27, with managers offered positions at other locations and hourly team members eligible for rehire. Those who do not accept transfers will receive up to 60 days of pay. Shake Shack's leadership emphasizes their commitment to supporting team members during this transition while continuing to expand their presence across the country.