Shake Shack (SHAK) is betting more on the future of Penn Station, New York City's major transit hub, rather than on its grimy, hard to navigate present state.
The upstart better burger chain opens its doors to a new location inside Penn Station on Saturday in the hopes of giving hurried commuters the taste of a real hamburger and shake, as opposed to what is served up at the McDonald's (MCD) a few doors away. For Shake Shack, the brand spanking new location is likely a win win.
First, some 650,000 people go through Penn Station each day, more than the daily number of passengers for all three main New York City area airports combined. That sizable number of people coming from New Jersey, Long Island and elsewhere will put the Shake Shack name front and center with groups that have unlikely ever tried the company's food before. It will obviously help put a ton of cash in the register, too.
"Penn Station is pretty busy, it's the right place to put a Shake Shack for sure -- there are just prime spots in New York City where people are, and Penn Station is a natural community corridor," Shake Shack's Senior VP of Operations Zach Koff told TheStreet in an interview (video below).
While the daily traffic today in Penn Station is a nice aspect to the story for Shake Shack, the opening is more about getting out in front of the hub's long overdue modernization. After all, it's unlikely Shake Shack would take its premium burger brand to Penn Station without efforts by government officials to upgrade the facility's amenities and general appearance. As it stands, the current condition of Penn Station borders on a New York City embarrassment, while adjacent stores consist of struggling Sears Holdings (SHLD) owned discounter Kmart to cheap fast-food slinging Subway.