Shake Shack launches French onion soup burger

As value wars take hold across fast food, Shake Shack aims to offer premium items at a discount.

Building off its recent success with the $10 Dubai Chocolate Pistachio Shake, Shake Shack will launch its latest menu innovation Tuesday, this time featuring French onion flavors. The burger chain will introduce its French Onion Menu, featuring its new French Onion Soup Burger, first on its app on Sept. 9 and then across all channels on Sept.12. 

The burger is a made-to-order quarter-pound beef patty topped with Gruyere cheese, caramelized onions, crispy sweet onions and roasted garlic Parmesan aioli on a toasted potato bun. It will also include the chain’s first-ever beer-battered onion rings and Parmesan garlic fries.

Like the Dubai shake, it’s priced at a premium compared with the chain’s other items at $10.99. The Dubai shake was the highest-priced shake in the company’s history, and it sold out nearly everywhere, CEO Rob Lynch told CNBC.

Lynch called the chain’s premium item rollouts the “democratization of fine dining.”

“We are really bringing great value to the marketplace by delivering burgers that you’re going to have to pay $25 for in a local burger shop, and we’re selling them for $10 or $11,” Lynch said in an interview. “Our model is all about continuing to bring food and culinary experiences that you just can’t get anywhere else. … We feel we’re an incredible value for the money.”

The company is now mapping out 18 months of ideas for its menu, he said. Lynch added the premium limited-time offerings will allow diners to “self-select” higher-priced food, rather than Shake Shack hiking prices on its core menu.

In the fiscal second quarter, Shake Shack beat Wall Street expectations on the top and bottom lines, with revenue increasing 12.6% to $356.5 million. However, same-store sales were up 1.8% from the prior year, weaker than expected.

Lynch said despite some pockets of softness in major metros like New York City, the business on the whole is strong, as growth in markets including Texas and Florida help to offset the weakness.

Some fast-casual restaurants are facing slowing sales after initially bucking the broader industry trend.

“Shake Shack is positioned very different in the marketplace. That doesn’t mean that we can take our eyes off of the macroeconomic situation and the consumer situation,” he said.

While beef prices continue to climb, Lynch said the company has made productivity improvements that have allowed it to offset some of those higher costs.

“We feel like we’ve done really hard work to be able to manage through this inflationary period, and when the cycle eases, we’re going to be even better off with some of the highest operating margins we’ve ever seen at the company,” he said.