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Wendy's Plans To Automate 6,000 Restaurants With Self-Service Ordering Kiosks (investors.com)
An anonymous reader writes: In response to the rising minimum wage, the fast-food chain Wendy's plans to start automating all of its restaurants. The company said it will have self-service ordering kiosks available to its 6,000-plus restaurants in the second half of the year. Wendy's President Todd Penegor said it will be up to franchisees to decide whether or not to adopt the kiosks in their stores, noting that many franchise locations have had to raise prices to offset wage increases. California's decision to gradually raise the minimum wage to $15 by 2022 will impact Wendy's 258 restaurants, all of which are franchise-operated. About 75% of 200-plus Wendy's restaurants are run by franchisees in New York, a state that is also on its way to $15. Penegor said, wage pressures have been manageable both because of falling commodity prices and better operating leverage due to an increase in customer counts. The company is still "working so hard to find efficiencies" so it can deliver "a new QSR experience but at traditional QSR prices." The CEO of Carl's Jr., Andy Puzder, is also looking into replacing many of its workers with machines to save money.
Just make it a chatbot that responds to key terms "bacon" or "cheese" with "yes, more please" and you've got a winner!
I think you meant "Leverage Synergies" "Core Competencies" "Stockholder Value" "You should be happy to just have a job here"
America is shedding jobs at an epic rate so that the rich can get slightly richer. The only reason these corps "can't afford" a higher minimum wage is because they need to protect their obscene profits. We're all in this together and we're all headed to the same grave. Let's try helping each other out instead of seeing who can amass the biggest pile of cash at the expense of other people. A revolution is brewing.
We saw the same thing with Subway and Papa John's CEOs telling us how the Affordable Care Act was going to bring the sky crashing down on their empires, yet both are doing just fine.
Subway is not, actually...
How much of the cost of the product is actually labor? This one is a big - and difficult - one to answer.
No it isn't... labor is generally just as expensive, if not more expensive than the cost of the food... These are well known costs within the food business...
A lot of corporate types like to live in the fantasy where doubling a worker's salary means everything they make or do is now twice as expensive, but we know that is not the case.
No one believes that who runs a food business... but it will cause overhead to rise about 16%, give or take, for most such places.
That is their existing profit margin, they don't have 16% to give.
The human cost of their product is likely 10-20% at most.
Then you are misinformed, it is at least double that...
When I worked in fast food, our store seemed to hover at 20-25% of revenue for labor cost. I've been told that that is fairly low, and that 30% is the industry average. California has a current minimum wage of $10 per hour. This would mean that $15 would be a 50% increase. If a fast food location there were to give everyone a 50% raise, that would result in needing to increase revenue by 15% to make up the difference. I don't feel that 15% over six years is a very large increase.
It's exactly double that by most measurements I've seen. So companies will have to raise prices? There will be more people able to afford them which will only help their bottom line. Henry Ford acted with a great bit of social responsibility by paying his employees enough to where they could afford one of his cars. The least a fast food place could do is pay its employees enough to afford one of its shitty meals.
I ignore Anonymous Coward posts. If you want to discuss something, that's awesome. Log in.
You are assuming that there are other jobs for these people to find. Automation will out-pace job growth at some point. What do we do when there are only 80% as many jobs as people? When there are only 10% as many jobs as people? There is only so much trash to pick up.
Machines will not forget things in your order, flirt with the machine next to them, or spit in your food. It will make your order absolutely the way it is told to, and it absolutely will not stop, ever, until you are fed. At least, that's what Sarah Connor told me.
Restaurant operating cost typically are 1/3 Labor, 1/3 Food Cost. You can lower one by increasing the other. You can lower your food cost by purchasing more raw ingredients but you need the staff to prepare it. You can lower your labor cost by buying prepared and just heating it.
The remaining 1/3 goes to Sales and Marketing, Admin, Heat Light and Power, and other overhead. Hopefully after that it's profit.
He should ask himself the question that if everyone replaces their employees who will have the funds to eat his food?
DRM? No thanks, I'll just get it somewhere else...
How about everyone who wants basic income all get together and make it happen? There is nothing stopping you all from pooling your money together, and letting the ones that don't want to work live off the humongous surplus of cash your system is bound to create. I mean if basic income is feasible, that is.
Firstly, deduct expenses (health insurance, housing etc.) and that $31k will melt away like a snowball in an oven.
Secondly, the fact that we pay many professions insultingly low wages is not an argument against paying burger-flippers $15 an hour. It is an argument for paying other undervalued professions more.
Thirdly, whether someone spends 40 hours a week transplanting hearts, laying bricks, nursing the elderly or flipping burgers, none of those is a leisurely stroll in the park. Anyone working a full-time job deserves to be able to afford a modest standard of living in my book. Otherwise, what is the point?
Rudolf Hess edited Mein Kampf. He was the very first grammar nazi.
You have no right to tell others what they should think is right.
Sure you do. You can tell others anything you want to tell them. What you don't have the right to do is force them to comply.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
They do once in awhile. Usually it involves pitchforks and torches though.
Total CEO compensation was $21 Million out of sales of $2.4 Billion.
I love Jesus, except for his foreign policy.
Civil unrest and war. When you have robotics and AI that render people functionally obsolete on a planet with 7.4 BILLION people, there's only this logical conclusion. It's what will happen when one group of people don't want to support an endless growth of people that consume vs produce to their benefit. This is not my position of course; I'm a Christian. I'm just simply telling you what will occur based on human nature. Question is, once super AI sees our destructive nature on full display (World War 3), I can only conclude that the future of our species will be planned for permanent exit from the evolutionary tree of life. God help us all.
Life is not for the lazy.
I don't know what planet you live on, but here on planet earth Subway overtook McDonald's some time ago as the fast food chain with the largest number of locations world wide. They are continuing to open new locations - in the US and around the world - at a much faster clip than McDonald's as well. Even with most of their locations franchises, how would they be able to keep opening so many new restaurants if they were not doing well? They would have a hard time convincing franchisees to put down the capital to open a new location if they were doing poorly.
Are you sure about that? http://www.wsj.com/articles/su...
The Daddy casts sleep on the Baby. The Baby resists!
Total CEO compensation was $21 Million out of sales of $2.4 Billion.
The problem perhaps, is not so much the idea that basic percentages of total sales is the bottom line, but what value is added by that 21 million dollar expense.
As well, would it look like such a small percentage if the 21 million dollars is compared against total profit instead of total sales? We all know the answer to that.
There is an inherent problem when Billionaires and multi-millionaires tell people making 20K a year that they are making too much money.
I dunno if my outlook is so screwed up or what, but it seems to me that trying to put as many Americans as possible out of work - or at least have them work for as little as possible, just isn't sound business strategy, especially for substandard eateries like Wendy's, who don't exactly cater to the wealthy.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
But socialism as a political system requires high levels of taking at the barrel of a gun.
As the taxation systems of all government types are enforced by their armed police forces, your statement is completely content-free. Do you have a point to make?
Every political system requires taking at the barrel of a gun.
At the end of the day, that's the ultimate authority behind any political system - if you don't follow the rules someone has the means to force you. Every capitalist transaction is finally backed up with a gun. Don't pay, we'll sue you / arrest you. Refuse to be arrested we'll shoot you.
I would throw the concept of Mazlow's Pyramid into this. If basic food and security are not present, you will not get much from people in the way of advances. By a guarenteed basic income, which would let people focus on other things than trying to eke enough for food, it would allow people to spend time doing research, making stuff, designing cooler items, and advancing the arts and sciences in general. The Renaissance is an object lesson to this, when people had time to do something other than toil in the fields.
It sounds "cool" to tell people to just go eat cake, but that philosophy has its blowback. Look at how the US has stagnated, while countries that guarantee some means of knowing where one's next meal is coming from are advancing. A population that is barely existing is not a population that is inventing and advancing science.
If I received $2000 a month free:
rent: $950 / month for a modest 2 bedroom apartment in a 100+ year old triplex made of wood. Not exactly the best apartment around.
electricity: $40 / month during the summer. In the winter, this can skyrocket. Last year, while my region of hte planet was the coldest place on earth outside of the poles, my total winter electricity bill was slightly over $1000
internet: $74 / month
mobile phone: $80 / month
monthly bus pass: $82 / month
groceries: $400 / month
$1,626 / month. That leaves me with a scant $374 of disposable income, per month. Except that one month where I bought a pair of jeans and brought me down to $274 for the month. Then there was that time I went camping (which is fun, but at this rate, it's the only kind of 'traveling' I can afford) and I had a flat tire and it ate up $250 leaving me with almost nothing left.
But hey, if my disposable income suddenly shot up by $1626/month as I'm working, then I gee, what will I do with my new found wealth? I know... SPEND IT. I can goto the farmers market and support local farmers who produce expensive tomatoes that actually taste like something. I can goto that local thingamajig store that is more expensive than thinkgeek but gives me instant gratification instead of waiting for shipping. I can go eat at more expensive restaurants, drink higher quality beer, go traveling more often, and for longer periods of time, buy furniture that's better than Ikea, and so on.
Capitalism depends on consumerism. Increasing my ability to spend will help the economy, not hinder it.
Capitalism depends on consumerism. So it seems counter productive to not enable consumerism where possible.
I'm god, but it's a bit of a drag really...
Good question. First, good management would have three workers who don't have any customers to serve clean up the establishment and organize the kitchen. Second, good management would be able to determine that, on a Sunday afternoon in May at 3pm, you maybe don't need four workers behind the counter. Third, good management would quickly apologize to a customer who was kept waiting by flirtatious, irresponsible workers. And fourth, a good manager would make sure the customer experience is of a high enough quality to ensure the customer will want to come back.
When you're talking about return-on-investment, I think a good manager is worth paying for. Though, in a fast food establishment, a good manager can replace at least one general worker. A great manager can replace at least two.
You have the general premise wrong.
He's not telling them they are making too much money. He's telling them that due to outside regulation, keeping them around is more expensive than automating the job. You even nailed the 'why' when you said that Wendy's doesn't exactly cater to the wealthy - they need to keep the average selling price down, so they can continue to exist.
What we are seeing is the inevitable consequence of increases in levels of technology, and outside regulation forcing wages up on jobs that have traditionally not been viewed as a career position, but rather a stepping stone for someone starting out in the labor market. The company is going to do what is necessary to keep sales up and expenses down, and some governmental entity just made automation cheaper than people. The consequence of that shift is that those people are free to look for higher paying opportunities elsewhere.
The upside: we've had self check-out in supermarkets for some time now, and there's still plenty of standard check lanes open any time I go to the store, because that shitty scan robot isn't fast enough for anything but a few items, and doesn't give a level of customer service that you can get from another person. The market will decide which model it likes better - a computer that you place your own order on and then use SamdroidplePay, or talking to a person who can be friendly and courteous at the going regulated market wage, and not enraging if you have the gall to pay with cash, because we still haven't figured out a machine that accepts cash properly.
TL;DR: All of this has happened before, and it will all happen again. Are you similarly pissed off that your car wasn't hand-welded together by some guy named Burt that is still staggering around from pounding cans of Pabst the night before?
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
If that's true they need to get better accountants.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
You're a drama queen. I was in Finland last summer, and I didn't see any "high levels of taking at the barrel of a gun".
When mentioning "socialism", why do people like you immediately jump to North Korea or Mao's Great Leap Forward without acknowledging that there are socialist countries that have better outcomes, more economic and social mobility, greater liberty and more stable economies than anything that capitalism has ever produced?
You are welcome on my lawn.
Capitalist transactions only work because of the threat of violence. Otherwise, what's to stop me from just promising to give you money (or some other item in trade) for your item, and then taking the item and refusing to hand over the money? Social systems like this only work because there's a governmental system that ends up resulting in violent force if you don't play by the rules. Otherwise you'd have anarchy.
It's weird how libertarians are so dense that they can't understand this. They're a lot like the ultra-naÃve loony-left people who think that everyone is just going to behave and play nice because it's human nature, if only you just reason with them and plead with them. It's not.
I'm not at all a fan of Mr. Moneybags replacing all his workers with computers & robots, keeping all the profits, and putting them in offshore accounts until he can repatriate the money at a meager 7.5% tax. I'm also not a fan of Mr. Moneybags not paying American workers anymore who are unemployed and unable to buy pretzels at Mr. Moneybags's pretzel shop, drying up the American economy.
I am. I think he's doing exactly the right thing. His machines will do a much better job than humans and will do it more efficiently. And if more and more places like that results in the economy completely collapsing and turning into a civil war that makes Syria look like small potatoes, then that's what we deserve for doing such a poor job in electing our government. We need more automation, and to keep our economy strong we need a universal basic income and universal healthcare so that everyone shares in the fruits of the labor of automation. But if we're not going to demand that because we're too stupid, then we deserve destruction due to civil war.
Your question should be, "Why do people say that capitalism/socialism is a binary, one-or-the-other choice?"
This happens every time socialism is mentioned around here. People try to argue that you can either have socialism or capitalism, but not both, when there are very successful countries that have found a way for the two to co-exist and work together.
You are welcome on my lawn.
And the idiots trying to change the nature of minimum wage from a "minimum" to one that can support a family deserve this slap upside the head. If you are on minimum wage you should not be breeding. Wait until you have the financial stability to be able to devote time and resources to raising a child..
End of story.
You know, I used to feel as you do -- only idiots and people trying live behind their means end up in a screwed up situation trying to get by on minimum wage.
Then, the first summer during college, I worked on a high-speed assembly line of sorts. Made better than minimum wage, but not a lot better. Anyhow, most of the folks there were college students or young people who didn't yet have experience to get anything better, along with a few middle-aged women who were bored sitting at home, so they could come to work and do a non-stressful job while chatting with their friends.
And then there was Mike. I came to find out that Mike had a bachelor's degree, was reasonably intelligent, and was in his mid-40's. One time during a break he told me what he was doing there.
After college, he had a some white-collar office job (I forget). Anyhow, he did quite well, but then some crap happened at the company, and he was laid off. By that point he was married, had 2 kids, had a mortgage, etc. He tried desperately to find a job, but the economy wasn't doing great at that point, and after about 6 months, it was time to "suck it up" and just take what he could get.
For about 10 years he worked at the company I was doing the summer at, mostly as a handler who delivered stuff to the assembly line (which was paid more). He didn't make good money, but the place had good benefits which he needed for his family. And the company used to have a tendency to promote from inside, so he had been hopeful to get a promotion to a foreman or manager of that section... but the company stopped promoting from inside around that time, and started hiring people with business degrees instead.
Just about that time, Mike turned 40-ish, and he started having back problems. So eventually he couldn't do that job anymore, and he ended up working on the line... the most boring, stupid job in the world, with crappy pay. But he had benefits, and he had time in the company -- no longer a path toward management, but leaving there meant finding a better option. But he had been out of his field for so long that nobody would likely hire him (and he was too "old" to start as entry level again).
He was stuck. Not in a minimum wage job, but a pretty low paying job for the skills and intelligence he clearly had. But his family had been through some rough times, and this was a secure job for him (despite the boredom and low pay).
There are a lot more people out there like Mike. Stuff like this happens more than you think, once you get out in the "real world" and start finding out the stories of "poor people." There are all sorts of reasons that people on minimum wage end up having to try to support others or end up in difficult financial positions -- maybe someone has health problems and medical bills, maybe a parent had problems and needed to retire early, etc.
And what about people who go through a divorce, not of their own choice? The spouse abandons them and the kids, and what are they supposed to do? They thought they had a stable family and income, but not all things last. (And child support, etc. doesn't always solve those problems.)
There are lots of stories for why minimum wage people might have to support others. Some of these could be solved by having better social services to deal with some issues and a better "safety net" for these people, if you wanted to go that route. But if you actually talk to many of these people, you might be surprised how many are NOT just ignorant "breeders" who are popping out kids without considering the consequences.
Basic income is a concept created by people that want to stifle capitalism and devalue education and personal initiative to better one's self.
Er... not really. Some of its advocates are famous libertarians, such as Friedrich Hayek. And if there is one thing one can never say about libertarians is that they want to stifle capitalism.
The thing is, the worst for capitalism, far worse than taxes, is all the interference by big government itself, and basic income works against this. It allows us to downsize and dismantle entire governmental sectors by simply giving the money that would have gone into them directly to the people, who in turn would use it by purchasing from capitalist companies. Additionally, as more and more of those governmental bodies were dismantled, we could start transferring to the people part of the taxes that went into them, thus also lowering taxes overall. In the end, you get a small government, more freedom, and a functioning society that, while still relying on money from taxes, does it in a most definitely "non-welfarian-statist" manner. Also, less crime, because those who want to use cocaine, crack, heroin or whatever will have the money to engage in that and will be able to do so at home in a manner that would be safe for most everyone.
There's no practical downside to this proposal. It diminishes government, it lowers taxes, it lowers crime, it incentives business, it provides welfare without being actual big government-style welfare, and it requires just a small chunk of all the surplus generated by an exponentially-growing economy. In fact, wealth for those who work will continue expanding exponentially, just a little less exponentially than it might otherwise. It's cheap, and it's effective.
Conservatism: (n.) love of the existing evils. Liberalism: (n.) desire to substitute new evils for the existing ones.