In the Burger Battles: My Money’s On In-N-Out

burger warsPeople in NYC love both Shake Shack and Danny Meyer. Heck, everyone loves Danny Meyer. His best-selling book, Setting The Table, changed the way we all think about hospitality.

That said, Shake Shack seems to be more of a NYC obsession and may not be catching on nationwide. My friends from LA, who want to love it as much as we do on the East Coast, invariably shrug and we agree to disagree. But my sense is, for West Coasters: In-N-Out wins!!

I hadn’t given this much thought until I ran into this piece on Seeking Alpha about Shake Shack stock:

Stock has been cratering as same-store sales growth slowed to 4.5% from 12.9% a year ago. Same store guidance is estimated at 2.5-3% for the rest of the year. Thus, the growth projections were always unrealistic, and management chose a smart time to IPO.

Shake Shack may be an institution in NYC, where an unusually affluent populace likes to slum it every once in a while, but its product is actually amazingly similar to a west coast originated institution: In-N-Out Burger. They are so similar, in fact, that I doubt most people could tell the difference between the two in a blind taste test.

Shake Shack may have been able to boast 30% margins and huge lines in New York, where it had little competition on product, and its original Madison Square Park location meant that the local customers didn’t care about the price, but now that it is opening other stores, the figures are starting to show the appeal doesn’t hold up against broader competition.

One final note: I’m not a burger fanatic but I do care about ambiance – a lot! – and for me the Shake Shack design and vibe is far superior to any of its competitors, including In-N-Out.

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