Here's Why It Will Be Extremely Difficult For Shake Shack To Grow As Big As Chipotle

Shake Shack Inc SHAK reported much better than expected second-quarter results on Monday. Ever since its stock market debut, both investors and experts have compared the company with Chipotle Mexican Grill, Inc. CMG. So, can Shake Shack ever be as big as Chipotle?

Sam Sam Oches, QSR Magazine editor, was on CNBC Tuesday to answer that question.

Chipotle Has Unique Products, Shake Shack Does Not

"This is the big question that Shake Shack is facing moving forward is that, lot of people like to compare Shake Shack to Chipotle, it's a little bit apples and oranges," Oches began."But the common touch point that these two companies have is that they are both fast casual restaurants with high quality fresh made to order ingredients."

"So, if you do compare to something like Chipotle -- which has expanded across the country -- the challenge for Shake Shack is that it is not really a unique product. It's a great product, burgers and fries, really wonderful ingredients."

He continued, "But when you look at Chipotle, Chipotle has a wholly unique product and not as many competitors whereas Shake Shack is up against a whole host of burger and fries competitors. So, as it moves into other towns, it's really going to have to work hard to secure customer loyalty because there are dozens of burger brands."

There Will Always Be Demand For Big Burger Chains

Oches was asked if investors should give more respect to big burger chains that has been in business for long, especially when new chains specializing in burgers are getting record valuations. He replied, "I would say yes purely because remember burgers and fries, I mean, this is never going away. America loves burger and fries and despite a move towards healthier ingredients and diets and all these things, burgers and fries will never go away."

"So, when you talk about even the larger companies like McDonalds, Wendy's, Burger King, there is always going to be a demand for their products because America loves their products."