Posted on 06/23/2017 2:12:56 PM PDT by Enlightened1
Cowen says McDonald's will upgrade 2,500 restaurants to its "Experience of the Future" technology by year-end, which includes digital ordering kiosks.
The firm raises its rating on McDonald's to outperform from market perform and price target for the shares to $180 from $142.
Same store sales estimate for 2018 raised to 3 percent from 2 percent.
McDonald's shares hit an all-time high on Tuesday as Wall Street expects sales to increase from new digital ordering kiosks that will replace cashiers in 2,500 restaurants.
Cowen raised its rating on McDonald's shares to outperform from market perform because of the technology upgrades, which are slated for the fast-food chain's restaurants this year.
McDonald's shares rallied 26 percent this year through Monday compared to the S&P 500's 10 percent return.
Andrew Charles from Cowen cited plans for the restaurant chain to roll out mobile ordering across 14,000 U.S. locations by the end of 2017. The technology upgrades, part of what McDonald's calls "Experience of the Future," includes digital ordering kiosks that will be offered in 2,500 restaurants by the end of the year and table delivery.
"MCD is cultivating a digital platform through mobile ordering and Experience of the Future (EOTF), an in-store technological overhaul most conspicuous through kiosk ordering and table delivery," Charles wrote in a note to clients Tuesday. "Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps [basis points] contribution to U.S. comps [comparable sales]."
He raised his 2018 U.S. same store sales growth estimate for the fast-food chain to 3 percent from 2 percent.
The analyst raised his price target for McDonald's to $180 from $142, representing 17.5 percent upside from Monday's close. He also raised his 2018 earnings-per-share forecast to $6.87 from $6.71 versus the Wall Street consensus of $6.83.
(Excerpt) Read more at cnbc.com ...
Yeah...That was over 40 years ago when I was in my twenties...
I think you are a tough guy that throws hamburgers at people when he gets his knickers in a twist.
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Most are actually ahead of McDonalds, in that they have converted their kitchens to automation, but keep the superior human connection at the ordering point.
McDonalds will fail completely if they don’t figure this out soon.
Intelligent people do not willingly communicate with stupid machines.
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Go back to picking on bloggers...
I’m just glad you didn’t post from a blog!
McDonalds and others are already using this technology in China, at least what we saw last year in Beijing and Shanghai, so this should be no surprise for the foolish progressives.
Of course, now I can see them passing laws prohibiting automation or requiring people to be paid if if they aren’t working.
LOL...yeah, I know...he scares me to death...LOL
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>> “Go back to picking on bloggers.” <<
He’s too busy picking on his nose.
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Interesting. Maybe now that Dustbin DoDo is in office?
“I dont know why anyone thought the $15 minimum wage would hurt fast food. Looks like its the impetus to streamline and cut costs. Oopsie!”
McDonald’s and the other big boys can roll with it. But an ENTIRE SEGMENT of the restaurant business will soon be wiped out...the mom-and-pop places that (obviously) don’t have the resources to automate their workers.
We’ll end up like much of Europe - fast food (with no table service) and upscale places that only the wealthy can afford. The Leftists that make these decisions KNOW FULL WELL that this will be result (they are not dumb, not dumb at all), and this is EXACTLY what they want.
LOL
“Im not sure how many employees this will really save a fast food joint, because someone will still have to pick the order, and someone else will have to deliver to the table.”
The only part that we really see is the front end. In the back, they’ve been automating like crazy already. Sure, there will be a skeleton crew left, but not much more.
I asked for iced coffee at a McD then years ago. The clerk immediately poured out the coffee into the glass with ice in it then turned to me and with a smile asked, “what flavor?” I said what she had would be fine, I didn’t want any cream of sugar. She looked perplexed, ‘I’m sorry, we don’t have that.” I had already paid for it and again asked her to just pass the cup over to me. The shift manager saw a problem and walked over saying she would take care of it. She took the cup and asked, “What flavor?” We repeated the process and argued a bit but she could not hand me the iced coffee unless I got a flavored creamer in it. I asked for my money back and was told that was impossible. Then the district manager came out of the office and asked what was the problem. We again went through the sequence and a big burly customer yelled at me for harassing the clerks saying he was going to beat my ass... a line cook emerged from the back and took the cup from the DM and handed it to me. I said thanks and headed for the door. I have not been a McD since. In one McD a clerk, shift manager and a district manager and a customer who were not smart enough to work in a MacDonald’s. I wonder if the line clerk got fired.
Correct.
Still, I laugh at how empty most Subways are after they went all-in with Mooch.
I go there rarely. Except for the po-dunk Kansas town I worked in - 1 McD, 1 Taco John’s and TWO Subway - the Subway’s were about 500-1000 feet apart.
Brilliant.
I agree that some of that would be eliminated by the kiosks.
Here’s where I’m coming from, and I’m not trying to be argumentative. I just have a general problem thinking this will save as much as they think.
In the old model...
Person takes an order. Person pulls the order. Person hands the product to the customer. Next!
In the new model...
Kiosk is used to order. Person pulls the order. Person goes to find the customer. Delivers food to customer. Next...
In the new model you eliminate the cashier. Then again, you add in a person delivering the food.
I do agree that there would likely be some savings, but I’m not convinced it would be as big a savings as one might think there would be.
You aren’t really eliminating a full FTE with each kiosk. You may be eliminating 20% of an FTE with each kiosk.
That may pay for itself. Then there’s the issue of kiosk wear and tear.
I hope it works as planned. It would serve the Left right. All those protesters outside fast food joints, congrats! You just killed thousands of jobs.
Yes, the push - a national push - for a $15 minimum wage contributed mightily to automation and to the closing of businesses. Obamacare didn’t help either. I think McD is just the beginning.
Change takes time. For McDonald’s, it’s order takers now. At some point I expect the kiosk will microwave your burger as well. The fast food places that don’t follow McDonald’s lead will go out of business. There are people who love people, but in the end perhaps only Barbara Streisand will regularly pay more for a burger.
I’ve found that workers at grocery stores, Home Depot, etc. are so pleasant. They are almost always ready to show you how to use the self-check, eventually eliminating their own jobs.
It’s not too late. Eliminate the minimum wage and McDonald’s and others will reverse course.
Automate or not? I think it makes a lot of sense if it improves safety. Let the robots paint the cars, pour the steel, etc. Other than that, there are plenty of people who are willing to work for less than the cost of buying and maintaining a robot.
“Folks who want to work in a restaurant better learn how to repair and maintain the machines.”
My earlier comment regarding the fact that if $15 is the minimum wage, then the jobs available at that wage will require that amount of skill.
For example, people still have to clean toilets and tables at McDonalds. And if you’re hired there, you’ll spend 80 to 90 percent of your time doing just that. But you also better have training to fix the machines during the 10 to 20 percent of your time. If you don’t...they’ll hire someone that does have that training (and skill).
Thanks BobL.
I posted this to someone else, but it will explain my thinking here.
See what you think.
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