MW Shake Shack's Big Shack burger is more than an internet sensation. Here's what it says about the restaurant business.

By Claudia Assis and Bill Peters

Big Mac copycats enter the market as many in the industry struggle to grow their profits

People dine at the original Shake Shack location in New York City's Madison Square Park. So-called "value hooks" like the company's Big Shack burger have blurred the price boundaries in the restaurant industry.

Fast-casual chain Shake Shack's new Big Shack burger, an unmistakable riff on the Big Mac, is sending the internet into a frenzy. It follows the success of Chili's Big Smasher, another Big Mac knockoff, and comes as McDonald's itself struggles to get more people to buy its own iconic menu mainstay, made of two all-beef patties, special sauce, lettuce and, well, all the rest.

To some degree, such burger wars are yet another aspect of the "trade down" happening elsewhere in the retail universe, as people lean more on lower prices while their budgets creep higher. But when it comes to restaurants, the picture is more nuanced.

So-called "value hooks" like the Big Shack, which runs for $9.99 and is cheaper than some of Shake Shack's (SHAK) other offerings, have blurred the price boundaries in the restaurant industry. Now, a trip to the drive-through may not be that much cheaper than ordering the Big Smasher and living a bit larger at sit-down chain Chili's, owned by Brinker International Inc. $(EAT)$.

"We've had an intense value and promotional environment" in all types of restaurants for some time, said Brian Vaccaro, an analyst with Raymond James.

Chili's, as well as Denny's Corp. $(DENN)$ and Olive Garden, owned by Darden Restaurants Inc. $(DRI)$, have tried to underscore that the cost of their sit-down meals is not that far from some of the offerings at fast-food and fast-casual chains, and may even come with a nice booth. At Chili's, for instance, you can get a drink, appetizer and entree for $10.99 - although that price might be different depending on the area. Some Slam meals at Denny's can go for as little as $5. Meal deals at McDonald's Corp. $(MCD)$, similarly, have run for as low as $5 this year.

Chili's explicitly says that another of its entries in the burger wars, a quarter-pounder, is "another swing at fast food." Shake Shack, on its most recent earnings call, talked about its efforts to "balance premium sandwich offerings with value platforms."

Against this backdrop, fast-food restaurants are struggling to retain consumers, which has not been the case in other tough economic times. Fast-casual restaurants - or those that try to offer higher-quality meals at the speed of fast food - have also felt more pressure. BTIG analyst Peter Saleh said most fast-casual restaurants were losing traffic.

"For the first time in a long time, it seems like casual dining - traditional sit-down restaurants like Olive Garden or Texas Roadhouse - are gaining share," he said. "They're gaining more market share over [quick-service restaurants] and to a certain degree, fast casual."

Restaurants, much like their clienteles, are feeling squeezed. To win back customers, McDonald's has launched a slew of value-meal combos and standalone deals that just may be bearing fruit - but didn't for a long stretch. Chipotle Mexican Grill Inc. $(CMG)$ has drawn more skeptics, with its shares down nearly 50% so far this year.

Costs for workers, ingredients and packaging have risen for restaurants, following a half-decade's worth of supply shocks to the economy. Many restaurants, in turn, raised prices - by a lot. Last year, McDonald's said its average menu prices had gone up around 40% over the past five years.

At around that time, those price increases started backfiring. For a while, fast-casual restaurants benefited, as customers opted for a better meal that didn't cost a whole lot more more than fast food. And the fast-casual category was the last to weaken this year, whereas fast-food ran into trouble in earnest last year and perhaps even as early as 2023.

Others are leaning more on the "experience" aspect of dining, and refusing to join the deals wave. That aims mostly at younger consumers, who are seen as placing more value on hospitality than on dollar signs.

And some are not yet in the price wars. In a recent interview with MarketWatch, Cava Group's $(CAVA)$ Chief Executive Brett Schulman said that the Mediterranean fast-casual chain was reluctant to enter the discount fray, arguing that competing on the fast-food industry's terms wouldn't serve his business in the long run.

America has already had the chicken-sandwich wars, which by most accounts started with the version at Restaurant Brands International's $(QSR)$ Popeyes in 2019 and a tongue-in-cheek tweet to privately owned rival Chick-fil-A.

As for the burger wars, Saleh said there was some risk for further copycatting.

"The whole industry is a follow-the-leader type mentality," Saleh said. "In burgers, whatever McDonald's does, the rest have to follow suit or they give up share."

-Claudia Assis -Bill Peters

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November 25, 2025 08:00 ET (13:00 GMT)

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