China's Uncle Sam ready to test US market in NYC

Updated: 2014-09-02 09:51

By Elizabeth Wu in New York(China Daily USA)

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Beijing-based burger chain Uncle Sam is looking to compete with Shake Shack and other burger chains in New York City, according to a real estate insider.

"It's meant to be on a competitive level with Shake Shack," Newmark Grubb Knight Frank broker Dennis Karr said of Uncle Sam. He represented the China-based firm in a recent New York transaction, according to The Real Deal, a New York trade publication.

Uncle Sam has inked a deal on Fifth Avenue in the NoMad area (north of Madison Square Park) to rent 5,600 square feet of retail space at 307 Fifth Ave, between 31st and 32nd streets, in close proximity to a Shake Shack at Madison Square Park.

The price of the deal was not disclosed, but Karr pointed out to The Real Deal that asking rents in the immediate area average about $200 per square foot. The team looked at areas like Times Square and the West Village, but decided on NoMad because of the high volume of foot traffic from office workers and tourists.

Shake Shack is located nine blocks away at Madison Square Park with fast-food chain McDonald's to the north and two blocks away from a Wendy's and a Smashburger, a Denver-based chain that also recently opened in the area.

According to Statistica, a statistics online company, the fast-food industry makes up 77 percent of on-premise restaurants and drive-thrus (with the rest in off-premises dining -takeout, cafeterias and buffets) in the US and generated about $191 billion in revenue in 2013. That number is forecasted to exceed $210 billion by 2018.

Uncle Sam is trying to create "the perfect Chinese-American - or American-Chinese burger", Karr told The Real Deal. The current menu for Uncle Sam's in China includes Shrimp Burgers and New Orleans Chicken Burgers. The company also filed a trademark for the name "Uncle Sam's Famous American Burger".

"They have additional restaurants in China and they're using this somewhat as a laboratory for reaching customers," Karr told The Real Deal.

Darren Tristano, executive vice-president at Technomic, a consulting and research firm in the food industry, said: "Uncle Sam is more fast food than fast casual like Shake Shack." Tristano said that fast-casual restaurants tend to be higher priced.

"There is an opportunity for a number of customers with different flavor profiles." said Tristano. "I don't think customers who go to Shake Shack would consider Uncle Sam's though."

Shake Shack offers the Shack Burger, a cheeseburger topped with lettuce, tomato and shack sauce, and a Shack-Cago Dog, a hot dog, on its menu.

Shake Shack, with international locations in London, Istanbul, Moscow and Dubai, may be preparing for going public with an IPO, according to a recent Reuters report.

In terms of top-notch burgers, Uncle Sam's still has a lot to live up to. Although no In-N-Out Burger or Shake Shack Uncle Sam's bid to reach the burger connoisseurs of America looks promising.

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For China Daily

(China Daily USA 09/02/2014 page3)