Abdullah Barez acquired to Shake Shack vivid and early on Thursday morning, a few hours earlier than the U.S. burger joint opened its first Canadian location in Toronto’s Yonge-Dundas Square.
Barez, who labored a morning shift, was out entrance by 7:45 a.m. ET. He mentioned the Tim Hortons breakfast he had very first thing ought to tide him over whereas he spends the remainder of the morning in line ready to seize Shake Shack for lunch.
“I’m like, you know what, why not try it out for the first time? I’m just looking forward to trying new food,” he mentioned.
The well-liked fast-casual restaurant, beloved for its smash burgers, crinkle cheese fries and frozen custard, is dipping a toe into the Canadian market — however its success may rely on prospects keen to fork out larger costs.
The chain is beginning with a lone restaurant, with plans to broaden throughout Canada with 35 places by 2035.
“Canada’s been on our radar for about eight years or so,” mentioned Michael Kark, president of worldwide licensing at Shake Shack, in an interview with CBC News.
He famous that Shake Shack first examined Canadian waters in 2017 with a pop-up, however mentioned the chain was taking its time with an entry right here till it discovered the precise native companions. Toronto-based companies, akin to chocolatier ChocoSol and bakery Brodflour, are amongst its native suppliers.
“We didn’t want to follow those who have come in and treated [Canada] like the 51st state,” he mentioned.
U.S. burger chain Shake Shake has opened its first Canadian location in Toronto’s Yonge-Dundas Square. Experts say U.S. chain eating places often do properly in Canada, however its elevated value might show to be troublesome to swallow for some.
The firm was initially conceived in New York in 2001 as a high-end scorching canine cart earlier than it opened its first restaurant in 2010. It now has over 500 places worldwide.
There’s no denying that Shake Shack is promoting a barely pricier burger — its signature ShackBurger goes for $8.49, or $12.49 for a double patty.
Kark mentioned the upper prices are partially as a result of Shake Shack sourcing a few of its substances regionally. That additionally makes it stand out from different chains — it is “more like a fine-dining restaurant than a quick-serve restaurant.”
The firm will serve a handful of things distinctive to its Toronto location, like a maple salted pretzel shake, and it will additionally diverge from different fast-casual joints by serving Ontario wine and native beer from Toronto-based Bellwoods Brewery.
“We think that we can deliver an experience,” mentioned Kark.
A U.S. burger joint in Canada requires ‘good planning’: analyst
Canada has been a scorching ticket for premium informal eating places like Blaze Pizza, Chick-fil-A, Chipotle and now Shake Shack, based on Robert Carter, an business analyst with the StratonHunter Group.
Restaurants in that quick-service class signify about $40 billion to $50 billion of the $90-billion restaurant market in Canada, which is in any other case dominated by main fast-food chains like McDonald’s.Â
“In times of economic uncertainty, there’s some shifting going on,” mentioned Carter. “Maybe people aren’t going out to the higher-end restaurants as much, but the quick service does quite well.”
Still, Canada has seen some colossal failures.
Asian fusion restaurant P.F. Chang’s is well-liked within the U.S., however its few places in Canada “unfortunately failed miserably,” mentioned Carter — partly as a result of a lack of demand for such a chain in a numerous market the place smaller eating places concentrate on ethnic cuisines. And a number of Carl’s Jr. places have closed throughout Canada in recent times as a result of points with franchisees.
The key to operating a profitable U.S. chain in Canada, mentioned Carter, comes all the way down to a robust understanding of the market.
“It requires good planning, and requires [a] good Canadian partner to help identify and make sure that you understand the market.”
Shake Shack is working with Canadian personal funding companies Harlo Entertainment and Osmington, which Kark mentioned has made the chain’s entrance into Canada “quite smooth.”
Carter famous that the majority eating places are reluctant to move larger prices onto their prospects — as an alternative, manufacturers will introduce varied reductions to drive visitors whereas nonetheless providing a deal.Â
That dynamic is enjoying out within the U.S. proper now, as McDonald’s, Burger King and Wendy’s provide equally packaged offers within the $3 to $5 US vary. CBC News reached out to a number of chains to see if comparable offers had been provided in Canada; Wendy’s was the lone chain to supply a $5 breakfast deal.
“This is truly a pass-through from the actual costs of food, the cost of labour, the cost of rent. So it’s becoming a much more difficult environment to be successful.”
Shake Shack can also be hoping to face out by providing alcohol. But as Carter notes, Canadian shoppers are consuming much less and alcohol gross sales by quantity have been on the decline in Canada, having slipped by 1.1 per cent in 2022-23 for the second consecutive yr, based on Statistics Canada.
What does that imply for Shake Shack? “I think they’ll quickly realize that it does not need to be a fundamental part of their business model,” he mentioned, noting that youthful prospects are extra eager about “fancy drinks,” just like the custard milkshakes that it provides.
The chain’s plan to open about 35 shops throughout the nation will not have a lot of an influence on different established manufacturers, Carter mentioned.
“It’ll be more some of the mom-and-pop independent burger places that may feel some of the pinch.”