Shake Shack to make South China debut next month

Iconic New York-style casual eatery has outperformed in Shanghai, Beijing

Shake Shack Inc, New York's iconic casual dining establishment, is bullish on the Chinese market and plans to further increase its investment and open more stores in the country, said its top official.

After making its debut in Hong Kong, Shanghai, Beijing and Macao, the global fine fast food giant will open its first store in the southern part of the Chinese mainland in the MixC World Shopping Mall, Shenzhen, Guangdong province, in May.

By 2030, Shake Shack and licensee Maxim's Caterers Ltd plan to open at least 15 chain stores in South China, including locations in Shenzhen and Guangzhou, Guangdong, as well as Fuzhou and Xiamen in Fujian province, and 55 chain stores in total in the Chinese mainland, said the companies.

"We are very excited about the opening of the Shenzhen outlet. When I was touring in Shenzhen last year, I was amazed by the growth and vitality of the city, where a great amount of people are moving and building up dynamism. We just felt now is the time to bring Shake Shack to the city," said Randy Garutti, CEO of Shake Shack.

Garutti said that similar to the Shake Shack store in Shanghai, the one in Shenzhen will also have its own localized features. In terms of menu, the store has "Shenzhen Exclusives".As the subtropical city is rich in guava, it will launch "Fan'tastic Shenzhen"－a vanilla custard treat blended with guava, topped with passion fruit, mango, whipped cream and salted plum powder.

"Be-an Idol"－a red bean-flavored ice cream topped with grass jelly－is also on the exclusive list, as grass jelly is a popular choice among Cantonese because it helps relieve humidity-related overheating.

In terms of restaurant decor, Shake Shack invited Shenzhen-based artist Lee Yoyo to combine New York styles with Shenzhen characteristics.

On Jan 24, 2019, when Shake Shack established its first store in the Chinese mainland in Shanghai, customers initially lined up for as long as seven hours. On ordinary business days, hundreds of people circle around the old Western style villa where the store is located to get a fresh bite of casual US cuisine.

Huang Tao, an independent public relations expert, attributed Shake Shack's success in China to its smart business strategy.

"In terms of site selection, whether it's the Xintiandi commercial zone in Shanghai, or Sanlitun in Beijing, Shake Shack opened stores at places where high-end consumption groups gather. To cater to local consumers' eating habits, it has made slight adjustments to its foods and beverages. The combination of American cuisine and local features is a major attraction for consumers," Huang said.

He added that Shake Shack pays attention to enhancing user experience. "Made-to-order food requires a certain waiting time. To ease consumers' anxiety when they are standing in line, it offers free desserts to consumers. People can also check their order status on the restaurant's online platform."

Despite the great success Shake Shack has so far enjoyed in China, Garutti said the company does not plan to expand its presence in the country too rapidly.

"We do one burger and one Shake Shack at a time. We build the store, and we work hard to make it a great gathering place. We don't just keep building and building without thinking about it," he said.

Speaking of China's business environment, Garutti said that the company appreciates the warm and hospitable business climate the country has offered.

"Our local partners helped us find locations, hire great people, enabling us to really grow a business locally. The government is cooperative, and we have established an incredible partnership," he said.

China has been stepping up efforts to encourage foreign investment and optimizing its business environment in recent years. Specifically, it has been cutting its negative list, relaxing restrictions on market access, clarifying market regulations and improving services.

China's actual use of foreign direct investment surged 31.5 percent year-on-year to 176.76 billion yuan ($26.07 billion) in the first two months of this year, said the Ministry of Commerce.

"Our restaurants in China are the busiest ones for Shake Shack. We are confident about the market, which is the most resilient during the pandemic," Garutti said.

"We remain humbled by our fans in China and continue to be encouraged by the performance of our Chinese business through this recovery. It's a great time to deepen our roots in this market," said Michael Kark, chief global licensing officer of Shake Shack.