Automation displacing more workers in the fast-food industry
The move toward increased automation at fast-food restaurants is ramping up fast.
Wendy’s revealed last week that it plans to begin installing self-service kiosks at its restaurants by the end of the year — a move aimed at reducing labor costs linked to minimum wage hikes. The end result will be fewer employees.
The trend isn’t likely to end anytime soon, according to Jot Condie, president and CEO of the California Restaurant Association.
Harold Miller, vice president of franchise development for Persona Wood Fired Pizzeria, who also consults for other restaurant chains, put it more bluntly.
“Restaurant profit-and-loss statements simply don’t work when the labor rate is increased to an astronomical number,” he said. “It would be wonderful if the balance sheet worked … but it doesn’t.”
Under newly approved requirements, California’s minimum wage will rise to $15 an hour by 2022. That pay rate might not seem “astronomical,” but it does represent a 50 percent increase over the state’s current minimum wage of $10 an hour.
Last year, 14 cities, counties and states approved a $15 minimum wage through local laws, executive orders and other means, and more pay hikes are in the works.
In the case of Wendy’s, franchisees will decide whether they install automated technology at their restaurants.
In an interview with Investor’s Daily, Wendy’s President Todd Penegor said some franchise locations have already boosted their prices to offset wage increases. The company also plans to introduce a mobile order-and-pay system that’s intended to reduce employees’ work and responsibilities. Additional behind-the-scenes technology could likewise reduce the time it takes for employees to do things such as schedule shifts.
Wendy’s isn’t the only fast-food chain that’s embracing technology to shave costs.
McDonald’s is rolling out “Create Your Taste” touchscreen kiosks that will allow diners to custom-build their own burgers and order anything else on the menu. And about half of Panera Bread’s company-owned stores already have kiosks in place.
The Panera kiosks have iPad-style tablets with a full list of food items. Customers simply swipe their credit card, place their order and grab a seat. When their order is ready it will be brought to their table.
