Shake Shack lost millions due to George Floyd protests, curfews

Burger chain paid workers for full shifts despite closures, paid 10% bonus for about 3 months

Popular burger chain Shake Shack said Tuesday it lost an estimated $3.2 million in June sales because of store closures and reduced operating hours caused by the nationwide protests sparked by George Floyd's killing and the curfews put in place because of them.

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“As always, and especially during this recovery period, our priority remains the safety of our team and our communities," Shake Shack CEO Randy Garutti said in a statement. "Amidst our gradual sales recovery, we've started to open new Shacks again and are looking to the significant growth opportunity that we believe lies ahead for Shake Shack."

A pedestrian wearing a protective mask walks past a Shake Shack restaurant in Washington, D.C., U.S., on Monday, April 20, 2020. Photographer: Andrew Harrer/Bloomberg via Getty Images

Shack Shack's second-quarter total revenue exceeded $90 million. Shake Shack paid hourly employees for normally scheduled hours that were shortened or canceled because of protests and curfews, the company said.

The company also instituted a 10 percent pay raise for hourly employees in April, during the height of the new coronavirus lockdown, scheduled to end July 22.

TickerSecurityLastChangeChange %
SHAKSHAKE SHACK INC53.87+0.73+1.37%

Despite the negative effects of the coronavirus pandemic and closures, Shake Shack opened four company-operated locations during the second quarter in Sacramento, California, Los Angeles; Charlotte, North Carolina; and St. Louis.

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The company has relied on digital sales because of the pandemic and said digital orders were 60 percent of Shake Shack sales during the week ending July 1 compared to 84 percent during the week ending April 29.

Shake Shack faced criticism after receiving a $10 million small business loan that the company later returned. Union Square Hospitality Group, the parent of Shake Shack, said in April it had to lay off roughly 2,000 employees because of the pandemic.

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