Posted on 08/11/2015 5:45:11 PM PDT by thomasryan
Wages are rising in the restaurant industry. There are two reasons for this. Minimum wages are increasing in many states. And it’s tougher for growing concepts to find workers.
Consider The Wendy’s Company. On its earnings call earlier this week, executives acknowledged that wage costs are increasing — one of several restaurant chains to admit this in the last couple of quarters.
Part of this is coming from rising minimum wages. But another part is coming from competition for labor.
“There is a war on talent,” CFO Todd Penegor said on the earnings call. As such, the chain has to raise starting wages in some markets “to make sure we’re competitive in certain markets.”
What’s more interesting is what Penegor said the company plans to do about it: Invest in technology. Penegor said the company is looking at initiatives to “offset any impact to future wage inflation through technology initiatives.”
That could be self-order kiosks, which a number of chains have investigated, or automating the back of the house. “You’ll see a lot more coming on that front later this year from us,” Penegor said.
Wendy’s is hardly the only chain working in this direction. Several restaurant companies are complaining about rising wages recently. Those rising wage costs have lit a fire under many executives to look at technology to improve efficiency after years of avoiding technology like the plague.
Chains are working on speed and efficiency efforts. They’re giving smartphone apps new capabilities. They’re investigating kiosks.
To be sure, such efforts will provide ammo to some who believe that rising minimum wages will force restaurants to cut workers and replace them with robots. But efficiency efforts are necessary even absent any debate over minimum wage or rising costs.
Productivity could enable restaurants to raise pay and benefits without raising menu prices as much, so they can lure higher-quality workers and keep them longer. It would also make restaurants more competitive with industries encroaching on their turf.
At the NRA Show in May, for instance, Hudson Riehle, head of the research and knowledge group at the National Restaurant Association, noted that restaurants average $84,000 in sales per worker. By comparison, grocery stores average $304,000. And gas stations average $855,000.
Quick-service restaurants in particular, which are less service oriented and focused more on price and convenience, and which are competing directly with grocers and c-stores, need to reduce this gap.
It remains to be seen, of course, whether such efforts will work. Kiosks in particular inspire doubters, and NRA Show veterans will recall the periodic years robots would appear on the show floor, only to disappear as the industry avoided them. Restaurants aren’t easy to automate. But the moves are still necessary.
#6 The robot got the order backwards!
Sounds like your manager needs to be replaced. If a waiter/waitress is getting $30/hour in tips, that means their service is pretty darned good. That brings the customers back, over and over, and wins new ones.
Bingo. What's a half million in sales if the profit is only 10K?
“As long as they keep the Wendy’s Girl.”
She’s an extreme left-wing liberal.
Yeah, the maintenance guy will have to spread all those germs by himself...
Bwahahahahahaha! Push for $18 dollars an hour. The ones who haven’t done the math just might back it, and the taxpayer would get a break!
I agree completely.
I agree. She’s easy on the eyes and does commercials well, too.
That's maintenance bot and only if it's programmed too! Pretty soon these liberals will succeed in having almost all humans removed from every possible job, already my bank has removed almost all the tellers and placed advanced ATM's in the lobby and truthfully I would rather use a self checkout in the grocery store than put up with the incompetent and overly gabby humans at the checkout.
The tyranny of machines isn't for me. If I want to put the heavy thing in the cart instead of put it on the lower bagging area and then pick it up later and put it in the cart, well that works better for me. I have only ever used one of those infernal devices without it malfunctioning--all other encounters required human intervention anyway. I would much rather deal with a human.
I don't use ATMs either.
At least the robot taking my order will at last speak and undrstand English! That will be worth the price of admission.
This summer, while I was in PA, I went to a Sheetz and they have that type of ordering system, online screen.
True enough, but it does suggest that the technology behind these automated food prep and delivery systems has been around for a while and has become reliable enough.
The ordering automation was first spotted by me at a corporate fast food store in Fullerton, CA around 20 years ago.
So that when they screw up the order they can blame it on the customer entering it wrong?
I’ve ordered off the Kiosk at ‘Jack n Box’
She’s worth $15/hr.
“It is much better to enact a minimum-wage law even if it deprives these unfortunates of work… better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth more of their kind.”
Royal Meeker, Commissioner of the U.S. Bureau of Labor Statistics under Woodrow Wilson
Sounds like you’ll be OK then. The chains are going to ALL go automatic within the next two years (probably sooner) and a lot of these whiners are going to be unemployed.
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