When it comes to dining out, customers say Shake Shack SHAK, +0.55% has gotten far too pricey for what it’s dishing out. And that’s despite the fact that it’s even not the most expensive of the fast-casual and fast-food restaurant chains.
That’s the big takeaway from a study by Stifel SF, +0.82%, the wealth-management and investment-banking firm. The report looked at menu pricing at several popular chains, and it also looked at how customers rated these restaurants in terms of value — and highlighted which ones left them hungry for more.
So, what’s the most expensive chain, based on the average cost of a popular meal across 20 cities? It’s Panera Bread, with a price of $ 14.76. Shake Shack came in fourth, with a price of $ 13.50. The others in top five were Chipotle CMG, -0.72% at $ 14.34, Blaze Pizza at $ 13.72 and Jersey Mike’s at $ 13.23.
Then the 1,280 survey respondents were asked, “Which restaurant(s) do you believe have become too expensive for what you get?” Shake Shack topped the list by a wide margin.
Stifel assigned Shake Shack a numerical rating of 97 based on the survey responses, indicating a high dissatisfaction in what might be called the bang-for-your-buck department. The rating weighed the number of responses in relation to the number of restaurants the chain has in the U.S.
“When it comes to how consumers feel about a restaurant chain, it’s not all about price.”
Rounding out the top five restaurants that diners said have become too expensive for what you get were Blaze Pizza, with a rating of 48; MOD Pizza, with at rating of 31; Panera Bread, with a rating of 29; and Chick-fil-A, with a rating of 16.
On the flip side, consumers seemed to accept the value offered at chains such as McDonald’s MCD, +0.31% and Taco Bell YUM, +0.12%, both of which had a rating of 4.
The Stifel study had its limitations in that it didn’t consider every fast-casual or fast-food chain in the country. The study noted that Five Guys, for example, was even more expensive than Panera, with an average meal price of $ 16.33. But Five Guys wasn’t included in the bang-for-your-buck survey, so consumer satisfaction with the chain isn’t reflected in the report.
For Stifel managing director Chris O’Cull, the study clearly illustrates that it’s not all about price when it comes to how consumers feel about restaurant chains.
“Some are perceived as too expensive despite their meal prices being lower,” O’Cull said.
MarketWatch reached out to a number of restaurant chains for comment about the Stifel report, but not all responded immediately.
Chipotle chief financial officer Jack Hartung did respond. In a statement, he pointed to the brand’s value proposition, noting that the average price of the chain’s chicken burrito is under $ 9, placing Chipotle “well below our fast-casual peers.” (The Stifel survey looked at the pricing for a complete meal.)
As for Shake Shack, a representative referred to the following statement from a recent company earnings report: “In menu innovation, we continue to lead the way with dynamic and fun products, providing our guests with elevated, premium, high-quality ingredients that they can’t find in traditional fast food, other fast casual concepts or even casual dining. A Shack burger, fries and beverage is on average under $ 14, well within and often priced below the cost of other lunch or dinner options nearby.”