The Chicago burger market is getting more crowded, as well-known chains plant their stakes, aiming to prove that there is plenty of room to grow in McDonald’s backyard.
Checkers, a drive-thru-focused fast-food chain, says Chicago is one of its main expansion areas this year and next year. And Shake Shack, the upscale burger shop from restaurateur Danny Meyer, plans to open at least two Chicago locations, the first in a matter of weeks.
Other chains expanding in and around Chicago include Culver’s, Five Guys, Meatheads and Sonic. Red Robin Gourmet Burgers Inc. opened two of its smaller, fast-service Red Robin Burger Works locations in Chicago this summer.
The influx of such restaurants taps into the idea that diners see burgers, fries and other mainstays as food that is a good value, familiar, yet also customizable. With all of the burger places coming in, especially at higher prices, there is a chance there will be too much for the market to swallow.
“Where’s that share going to come from?” asked Darren Tristano, executive vice president at industry consulting firm Technomic. “These better burger places are going to compete with each other.”
Most of the newcomers are generally priced higher than chains such as McDonald’s, Wendy’s and Burger King, though Checkers competes directly with those chains, with an average meal price of about $6.40.
The Red Robin Burger Works locations, where meals cost about $10.50, include items from the full-service Red Robin chain, such as burgers and steak fries.
Meanwhile, mainstays such as Oak Brook-based McDonald’s are focusing more of their attention and advertising on items such as coffee to boost sales as customers try out the newer rivals. They are also making some upgrades to their offerings.
For example, Wendy’s took a cue from higher-end burger joints when it brought out its hit pretzel bun. And McDonald’s is testing a new way to customize burgers, just not in Chicago for now, as its sales at long-standing locations have declined.
Queried about the growing competition, McDonald’s spokeswoman Lisa McComb said the home of the Quarter Pounder is focused on serving its customers.
As Tristano sees it, Chicago could see the rush of burger joint openings slow and, eventually, sales could decline. A similar scenario is playing out now in the frozen yogurt venue after a rush of new entrants a few years ago.
But burger chains are plowing ahead, saying there’s enough demand, varying levels of prices and available locations to warrant their expansion plans. Checkers and Shake Shack, for example, are focused on hamburgers, fries and shakes yet cater to different clientele.
When a Checkers opened in June 2013 at 4320 W. North Ave., it shattered company records for an opening. The location rang up $108,000 in sales in its first week, versus a typical $30,000 to $40,000, recalled Jennifer Durham, Checkers’ vice president of franchise development.
Checkers is no stranger to Chicago. The chain had a number of locations in the area in the 1990s, before scaling back.
Now, Tampa, Fla.-based Checkers calls Chicago one of its key markets for growth. It plans to have 17 locations in the area by the end of the year, from 10 now, and to add eight to 10 more locations in 2015. It is scouting for locations that fit one or more drive-thru lanes, which stay open as late as 5 a.m.
Some Chicago Checkers are on track to bring in $2 million in revenue this year, well above the company’s system average of about $1 million, Durham said.
Checkers competes directly with McDonald’s, which Durham called a “wonderful competitor.” It tries to stand out against its larger rivals with items from fried shrimp to “Monsterella” cheese sticks. It plans to sell grilled cheese sandwich sticks this year, Durham said.
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Durham said a variety of factors make Chicago an attractive market, citing everything from the density of population to a large number of shift workers who come for late-night meals. The period after 10 p.m. accounts for about one-fourth of sales at Chicago locations, above the company average.
Shake Shack has Midwestern roots. It got its start selling Chicago-style Vienna Beef hot dogs from a cart in New York’s Madison Square Park in 2001. Founder Meyer was raised in St. Louis.
“One of the great things about Chicago also is, there just is so much tradition and people are very much fanatics of their own brands,” said Zach Koff, Shake Shack’s vice president of operations. “It’s such a great eating town in general.”
Shake Shack patrons often wait in long lines for burgers, hot dogs, craft beer, wine and frozen custard shakes in flavors such as Peanut Butter Marshmallow Swirl or Candied Apple. It has taken years for the chain, from Meyer’s Union Square Hospitality Group, to come to Chicago. It is open in Miami Beach, Fla.; Washington; Abu Dhabi, United Arab Emirates; Kuwait; Lebanon; London; and Moscow.
“It has always been on the radar,” Koff said of Chicago. “We found two remarkably great opportunities and locations to enter into the market.”
Shake Shack is putting the finishing touches on a shop at Ohio and Rush streets that should open by early November. Next year, it plans to open in a hotel going into the Chicago Athletic Association building across from Millennium Park.
While Koff would not disclose sales per restaurant, he said locations sell “upwards of 1,000 burgers per day” and that people typically spend $10 to $15 on their meals.
He hinted at more restaurants, calling Chicago an “incredible market” and saying the chain “will definitely grow.”
Twitter @jessicawohl