Shake Shack Quietly Taking a Page Out of the Starbucks Playbook

Shake Shack (SHAK)  is quietly getting in the mobile ordering game. 

The better burger player disclosed Wednesday that it has expanded its new mobile ordering service to two more locations in New York City. Shake Shack originally launched its first-ever mobile ordering app at one location in Midtown East in New York last month.

To order their burgers or chicken sandwiches, diners simply select their item and choose an available pickup time. All pickup times are in 15-minute increments. 

"Consumers are moving toward a get it to me whenever, wherever mindset," Shake Shack CEO Randy Garutti told analysts on a conference call. Garutti cautioned though that the company has "a lot to learn" when it comes to mobile ordering, and will continue to tweak the app before launching it in additional markets.

Ultimately, Shake Shack is headed down the road of some much larger fast-food chains with respect to mobile. 

Coffee and donut chain Dunkin' Donuts, which is a division of Dunkin' Brands (DNKN) , debuted its On-the-Go ordering technology nationwide in June this year. Available to the company's over 4.8 million digital rewards program members, a user can place a mobile order up to 24 hours in advance, select a desired pickup location and then schedule when he or she wants to pick up the order. Once in the store, customers can skip the line and pick up their orders from a designated area.

Meanwhile, Starbucks launched its Mobile Order & Pay capability nationwide in the fall of 2015. 

A great proxy on the potential impact to Shake Shack from mobile ordering is Panera Bread (PNRA) .

Panera continues to have success with restaurants it dubs "2.0," which are decked out with tablet kiosks for easier ordering to go along with an order in advance function for mobile devices. On a call with analysts on Oct. 26, Panera Founder and CEO Ron Shaich said sales at Panera 2.0 cafes are "materially outperforming" those without the new technology. Third quarter sales at company-operated restaurants -- many of which are in the new tech-friendly format -- rose an impressive 3.4%, outperforming the 0.2% increase at franchised locations.

About 593 company-operated Panera locations and 87 franchised spots are in the new format. Panera said it will convert as many as 230 company-operated stores to the new format in 2016, while remodels occur at 100 or so franchised sites.

Panera Bread and Starbucks are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells PNRA or SBUX? Learn more now.

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