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$1 burgers? Why Shake Shack CEO is avoiding fast food war

In the battle to win over customers, fast-food giants are engaging in a fierce discounting battle (Burger King's 5 items for $4, McDonald's McPick 2 menu or Wendy's 4 items for $4, for example). But don't expect anything similar from Shake Shack.

In fact, the better burger company's CEO is stumped by the extreme promotions.

Shake Shack cheeseburger and drink.
Getty Images
Shake Shack cheeseburger and drink.

"You've never seen us discount like that, and you won't," said Shake Shack CEO Randy Garutti in an interview at the ICR Conference in Orlando. "I don't know how they can afford to sell those things."

Garutti said the company could not sell its own dishes at similar prices.

"I firmly believe that people are more than willing to pay a couple dollars more to have a materially different experience," he added.

Even as fast-food giants double down on these rock-bottom deals, Shake Shack raised prices to the tune of 1.5 percent at the end of the year, and the chain will use price hikes to offset rising labor prices, Garutti said.

Shake Shack CFO Jeff Uttz told investors at the conference that the chain's starting wage in major urban markets starts at $12.

"We know $12, $13, $14 is coming," Uttz said, adding Shake Shack wanted to be ahead of the curve in boosting wage — and that, so far, morale is up among workers.