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Shake Shack wanted to steal In-N-Out's crown; now it's closing 5 locations in LA
Five L.A. area Shake Shacks close their door due to over-expansion
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Mike Mozart
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Flickr Creative Commons
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Shake Shack, the NYC smashburger export, recently announced that it will be closing five stores in the greater L.A. area this month. The closures include the Bunker Hill location, downtown Culver City, Koreatown, Silver Lake, and Westfield Topanga in Canoga Park.
The backstory
It’s been just eight short years since the company made big waves with its expansion to the West Coast, peppering SoCal with 20 stores. The move was seen as coming for the crown of beloved In-N-Out. But now it seems there may have been too much New York bluster.
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According to a statement released by the company’s CEO, Rob Lynch, the main reason for the closures is “underperformance.” But look at the SEC filing, and you’ll see a bigger picture. There, it says the store closures are needed because they "negatively impact other Shacks within their proximity by cannibalizing sales.”
Translation: the company opened too many locations. And rather than competing with the hometown heroes, it competed with itself.
What's next
Look, we don’t want to be haters here. We salute the quality of a good Shake Shack burger as much as the next person, and if your local is one of the ones going away, we feel you. But maybe, just maybe, there is something special about our local burger spots and the national chains that started here, which leads us to their doors rather than those of out-of-towners.
(Or maybe it’s just about strange market forces that are above our pay grade to work out. Who knows. But we cling to sentiment.)
Before Angelenos start singing a collective chorus of “Na Na Hey Hey Goodbye,” however, the company isn’t necessarily going anywhere. Last month, it opened its first drive-thru location in Torrance to great fanfare. The move signifies the company’s focus on suburban areas instead of urban centers. (Where there are fewer Shake Shacks… and fewer In-N-Outs? Just a thought).
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