Shake Shack Inc SHAK said this week same-store sales were down 29% in March as restaurants of all shapes and sizes are hurting in the current environment, CEO Randy Garutti said Friday on CNBC.
Everyone Is Impacted
All restaurants ranging from small "mom-and-pop" restaurants to large independents and even public companies like Shake Shack are impacted by the coronavirus,.
During the difficult time, Garutti's message to all employees is simple: "lead with hope, and act on reality." The unfortunate reality is the company has to act in complete opposition to its original core purpose of helping people gather together.
The company is doing all it can to remain relevant, including converting itself to a complete makeshift drive-through restaurant, even though not a single chain has a drive-through option, he said.
Shake Shack can continue operating at reduced sales because of its shift in strategy.
Shackburger Kit
Shake Shack is collaborating with Goldbelly to sell a Shackburger kit, which includes all the key components to replicate a burger at home. This was an easy decision to make and credit is given to the "entrepreneurial team," Garutti said.
Balance Sheet
Shake Shack drew $50 million from its revolving credit facility on March 24, which marks a reversal from a history free of debt since its IPO five years ago. If needed, the company has access to incremental liquidity sources.
A large portion of Shake Shack's spending is dedicated to opening new stores and management planned to exceed last year's 73 new stores this year. Putting these plans on hold will help preserve cash for the time being.
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