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Shake Shack's Founder On Industry's COVID-19 Recovery, Why Full Service Dining Is Hardest Hit

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Shake Shack's Founder On Industry's COVID-19 Recovery, Why Full Service Dining Is Hardest Hit

Full-service restaurants are bearing the brunt of the pandemic because the business model is not one that makes guests feel comfortable, Union Square Hospitality Group CEO and Shake Shack Inc (NYSE: SHAK) founder Danny Meyer said on "Bloomberg Markets."

Why Full-Service Restaurants Are Most Impacted: A full-service restaurant, if permitted to open in the first place, will typically have a greeter at the door, multiple servers or waiters, a sommelier and other potential "touchpoints," Meyer said.

Restaurants in New York City, as an example, were dealt a much-needed lifeline when the city made outdoor dining a permanent staple, the restaurant entrepreneur said.

Such an initiative would have never been dreamed of prior to the pandemic, he said.

The best part is that outdoor dining adds additional seating capacity above and beyond what was previously allowed, Meyer said. 

On the other side of the spectrum, the fast-casual or quick service group was able to show a much stronger or quicker recovery because it never fully depended on in-dining activity, he said. 

Related Link: Chipotle, ConAgra CEOs Explain How Digital Is Necessary To Win The Food Battles

Meyer On The Restaurant Recovery: Restaurants will hopefully soon be able to take full advantage of the large pent-up demand for dining, Meyer said.

People are craving the social experience of dining out in a public space and being able to "hearing the sounds and smelling the smells" of a restaurant, he said. 

At the same time, restaurants will still be able to cater to people who prefer to dine at home, in his view. 

Restaurants under Union Square's umbrella will likely implement measures that reduce interactions between staff and guests, he said.

Some examples include the ability for guests to pay their bill without interacting with the server — and smaller menu choices that highlight "six great items" instead of an overly complicated menu with 15 choices, Meyer said. 

SPAC Update: Meyer's special purpose acquisition company (SPAC) USHG Acquisition Corp is looking to acquire "culture-driven businesses" across food, beverage and categories like health or e-commerce. 

While Meyer is a restaurateur by profession, his many years of experience have led him to realize that "hospitality as a business principle applies across all industries," he said.

A company's ultimate success is derived 49% from execution, while the larger 51% relates to keeping all stakeholders happy and satisfied, he said. 

"We are at a time when what you do, as well as you do it, is no longer enough to distinguish your company as being the best in its field." 

 

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