Companies like Amazon and Uber have embraced automation to provide their services in ways that would have been impossible before. Now fast food companies are getting in on the action. McDonald’s is already experimenting with allowing customers to order food from touchscreen kiosks and now Wendy’s is following suit with kiosks, mobile ordering, and payment apps.
Todd Penegor, Wendy’s President, told Business Insider that before the end of the year they will be installing touchscreen kiosks in about 10% of their US locations and franchise owners will have the option of installing them.
According to Penegor, the move is in response to the rising cost of labor for the company. While corporate owned stores are seeing about 5% or 6% increase in wages, franchise locations are likely to see a larger increase. However, Penegor also sited competition for workers and paying a competitive wage “to access good labor” as other reasons for the increase in workforce spending.
During an earnings call, Penegor said they are “seeing a bit of a softer overall category in April” when compared to the previous two quarters. Penegor also said that the reason for the decline in sales is difficult but he listed “a cautious consumer, tougher spring weather in the Northeast, and a wider gap between the cost of food at home vs. food away from home as possible contributors.”
One of the largest contributors the increase labor spending impacting franchises is the rising minimum wage. Currently, all Wendy’s locations in California as well as about 75% of New York locations are franchise owned. In both states, the minimum wage is currently around $10 an hour and are gradually raising to $15 an hour.
According to a report by McKinsey, out of the 800 industries they looked at, 73% of Food service tasks have potential to be replaced by automation. These tasks include “preparing, cooking, or serving food; cleaning food-preparation areas; preparing hot and cold beverages; and collecting dirty dishes.”
While kiosks for ordering may help curb the rising cost of labor, this could be the first of many tasks that the fast food industry may look to automate.
