Shake Shack Uses AI Technology To Predict Traffic and Schedule Staff

Shake Shack has become the latest fast-casual restaurant franchise to use AI-driven technology to manage labor deployment. This technology can more accurately predict the number of team members needed in each restaurant and the optimal times to schedule them.

Shake Shack previously used unit sales to determine staffing levels at each restaurant. They will now be able to draw in additional information to help make these decisions. Factors such as each restaurant's channel mix, whether delivery, drive thru, dine in, and the menu mix will require more labor and preparation than other times.

Company officials and restaurant GMs can use time-motion studies to examine peak customer times such as lunch or dinner hours at some locations versus other restaurants that have steady business throughout the day. That data can create a custom-made model for labor scheduling for each restaurant.

“It used to have $1 million in sales equals this amount in labor, and GMs were deploying it however they saw fit,” said Shake Shack CEO Rob Lynch. Now we are giving them guidance, ‘Based on your business, here’s what you should be scheduling by hour.’”

Along with Shake Shack, officials with Chipotle, Sweet Green, and Cava have also indicated leveraging similar technology to help increase profitability during a period in which economic pressures are limiting the ability to increase menu prices. Although it is currently being used by some other restaurant chains, Lynch said the technology “could be a game changer for us.” He believes the operational shift will create a better experience for guests and increase opportunities for future growth.

These changes come at a time in which Shake Shack's second-quarter traffic was down 0.8 percent and the company closed nine underperforming restaurants in California, Texas, and Ohio, the first it has shuttered for non-construction reasons.

“That was just me coming in and saying, ‘Okay, you’ve never closed a restaurant before. Does that mean every restaurant we have is awesome?’” said Lynch. “These were just nine that weren’t delivering on the financial performance we wanted them to, and we didn’t see a path for getting them there.”

Cava has been testing a new labor model that is expected to be in 75 restaurants this fall and hopes to implement it systemwide next year. The focus of the model is to schedule team members in the best areas and times of their shift while prepping during down time. That has enabled managers to spend time on coaching rather than fill line gaps during peak restaurant hours.

Sweetgreen CEO Jonathan Neman said during the company's second quarter earnings call in August that the chain was working on labor staffing.

“We’re working on some things around labor deployment that we think can help us, not just on hospitality and throughput, but also in terms of continuing to leverage that labor line,” he said.

The full article about how Shake Shack and other brands are using AI to better manage staffing can be found HERE.