- Shake Shack will raise the cost of its food by 3% to 3.5%.
- Prices are increasing because of the rising cost of ingredients as well as labor shortages.
- Other chains like Chipotle and Dunkin Donuts are also increasing prices because of inflationary pressure.
- See more stories on Insider's business page.
Shake Shack will raise prices by the end of the year.
The burger chain's price increase will be to offset the rising cost of ingredients, labor, and construction materials, according to an article by Eat This, Not That!
The chain, which raised its prices twice last year, will be increasing the cost of menu items by 3% to 3.5% with the potential of a further increase in 2022, according to Restaurant Business.
Right now, a single patty ShackBurger costs $5.99 at Shake Shack. After the price increases, the cost will go up by about $0.16 to $0.19, making the price of the burger between $6.15 and $6.18.
"This is higher than the approximately 2% menu price we have historically taken at the end of most calendar years, and we'll be evaluating the need for further price increases that might go into effect in 2022," Katherine Fogertey, Shake Shack CFO, told analysts last week according to Restaurant Business.
Shake Shack did not respond to Insider's request for comment.
Inflation in the US continues to rise. Businesses are still recovering from lockdowns forced by the coronavirus pandemic and a host of issues, including massive shipping bottlenecks, supply chain disruptions, and labor issues. Shake Shack is experiencing a slower sales recovery than expected as it starts to reopen some locations that were closed because of the pandemic, the article said.
Shake Shack is not the only restaurant adjusting its prices. Other fast-food and fast-casual restaurants like Chipotle, McDonald's, and Taco Bell are also raising prices, according to reporting by Insider.
The greatest price increases are 10% at Taco Bell, 8% at McDonald's, and 8% at Dunkin', Insider reported.
The average meal at Chipotle will cost $0.30 to $0.40 more than it did before due to the company increasing its minimum wage for its workers to $15 an hour.
Although the cost of labor has increased, many chains have also faced problems because of labor shortages, the rising cost of commodities, and growing consumer demand.