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Labor will be Shake Shack's greatest headwind for the next few years, CEO says

  • Labor will be Shake Shack's greatest headwind for the next couple of years, said CEO Randy Garutti.
  • The country is moving toward $15 minimum wage, he said, and Shake Shake is experimenting with ways to pay its team while also having a solid business model.
  • Shake Shack is also toying with its menu. It unveiled chili last month that will be available for a limited time.

Labor will be Shake Shack's greatest headwind for the next couple of years, said CEO Randy Garutti.

"There's no doubt. With rising minimum wage, the amount that we're growing — we announced we're going to have our largest year of growth yet — and with that comes a lot of preparation and a lot of leadership we've got to develop," Garutti told CNBC's "Fast Money" on Monday.

The country is moving toward $15 minimum wage, he said, and Shake Shake is experimenting with ways to pay its team while also having a solid business model. The burger chain is testing a cashless kiosk in New York that it opened last month. Employees at the location are paid a minimum of $15 per hour.

Shake Shack is also toying with its menu. It unveiled chili last month that will be available for a limited time. The restaurant typically keeps a tight menu, Garutti said, but sometimes it likes to add things.

Shake Shack Chili
Source: Shake Shack
Shake Shack Chili

"I think it's going to be a winner," he said.

Shake Shack's same-store sales decreased 1.6 percent last quarter. Garutti defended the chain's strategy of sometimes opening stores nearby other ones. He said there are some instances where putting a restaurant near another one may have hurt sales, but that's a decision management will make "time after time."

"We're not running this business for percentages," Garutti said. "We're running it to make a lot of money, and we do that when we open more Shacks."