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McDonald's Hits All-Time High As Wall Street Cheers Replacement of Cashiers With Kiosks (cnbc.com)

Posted by BeauHD on from the experience-of-the-future dept.

McDonald's is expected to increase its sales via new digital ordering kiosks that will replace cashiers in 2,500 restaurants. As a result, the company's shares hit an all-time high, rallying 26 percent this year through Monday. CNBC reports: 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.

37 of 632 comments (clear)

  1. Let me guess.. by Dutch+Gun · · Score: 5, Funny

    Running Windows XP Embedded, and connected to the internet for convenient maintenance. What could possibly go wrong?

    --
    Irony: Agile development has too much intertia to be abandoned now.
    1. Re:Let me guess.. by Anonymous Coward · · Score: 5, Interesting

      Seriously, this^

      Wall street is the only part of the country that would cheer the loss of jobs.

    2. Re:Let me guess.. by ShanghaiBill · · Score: 5, Insightful

      Wall street is the only part of the country that would cheer the loss of jobs.

      Everybody should cheer. The purpose of economic activity is to create goods and services, not "keeping people busy". If the same number of burgers can be delivered with less labor, that is a GOOD THING.

      As the cost of production is reduced, some combination of the customers, franchisees, and shareholders will have more money to spend on other things, generating jobs elsewhere in the economy. For more insight on why pointless make-work jobs are NOT "good for the economy", you can read The Parable of the Broken Window.

    3. Re:Let me guess.. by ShanghaiBill · · Score: 5, Insightful

      Your argument hinges on those jobs being 'pointless,'

      If you can be replaced with a kiosk, your job is pointless.

    4. Re: Let me guess.. by Anonymous Coward · · Score: 5, Insightful

      Or put another way, I should have to put up with a sullen attitude and incorrect orders because some entitled college student hates working the register to pay for her Gender Studies "degree."

    5. Re: Let me guess.. by Anonymous Coward · · Score: 3, Informative

      Your studies are clearly not in Economics. You would realize that busy work is not valuable to anyone. Read a book.

    6. Re:Let me guess.. by ShanghaiBill · · Score: 3, Interesting

      look up the performance of the test stores and see that they've actually hired MORE people due to the increased workload.

      This is analogous to the way that ATMs increased jobs for human tellers.

      Increased efficiency leading to greater demand is known as Jevon's Paradox. It is one more reason why zero-sum reasoning about economic issues is almost always wrong.

    7. Re:Let me guess.. by skam240 · · Score: 5, Insightful

      Increased productivity is generally a good thing but I take issue with this point

      "As the cost of production is reduced, some combination of the customers, franchisees, and shareholders will have more money to spend on other things, generating jobs elsewhere in the economy. "

      Currently we have an unprecedented amount of capital accumulated at the top (within major corporations and the wealthiest few) that is most certainly not generating more jobs. Much of it is just sitting around accumulating interest. This is why we have a stock market so out of wack with our country's current level of prosperity. I fail to see how these interests having even more money will help generate jobs.

      If you actually want to generate jobs in a scenario like we are currently in you want the people at the bottom to have more money because they are going to go right out there and spend that money (being poor means you have a shortage of capital to spend which makes it is virtually assured they will be spending the money rather then saving it which generates far less economic activity) thus generating a greater demand for goods and services. The affluent and our major corporations generally all have enough capital to generate an epic amount of jobs, they don't do so because there's no demand for the goods and service these jobs would be providing.

      Now before people get crazy on me I'll just add on here that this does not make the super rich or major corporations "bad guys" by any stretch, I'm just explaining our current reality and how capitalism works.

      --
      I ignore Anonymous Coward posts. If you want to discuss something, that's awesome. Log in.
    8. Re: Let me guess.. by ShanghaiBill · · Score: 4, Interesting

      ..and if the day comes when only a small percentage of the population is fit to task for the remaining jobs?

      As jobs are automated, their cost of production drops, meaning money is freed up to spend or invest elsewhere in the economy. This means that not only is there no net loss of jobs, the additional production means that the same income can buy more goods and services. I know that this is hard for some people to believe, but higher productivity and more affordable prices do NOT cause poverty.

      If automation caused poverty, then America, Europe, and Japan would be starving, while countries that avoided the "folly of efficiency" such as Ethiopia, Mozambique, and Afghanistan would be rich and prosperous.

      Who are these companies going to sell to?

      Just for the sake of argument, let's say that "this time is different", and greater productivity really does lead to mass poverty. Then when the rich refuse to hire the poor, the poor could just MAKE STUFF FOR EACH OTHER. Since grocery store pies will only be available to the rich, I can grow apples in my backyard, and barter with my neighbor who can make them into pies in her kitchen. Perhaps we could even use little metal or paper tokens as a medium of exchange to facilitate these transactions.

      We could just build a parallel economy. But the difference is that the rich will use automation, while we will do everything manually. But the joke will be one them, because in this alternative universe, automation CAUSES POVERTY, so soon we will be rich while their efficient production will lead them to the poorhouse! HA HA HA!!!

    9. Re: Let me guess.. by Strider- · · Score: 4, Insightful

      As jobs are automated, their cost of production drops, meaning money is freed up to spend or invest elsewhere in the economy.

      Nice theory, but it only holds a certain amount of water. The price of a product and the cost of manufacturing it are only loosely coupled. A vendor will sel the product for whatever the market will bear. With the advent of easy (not necessarily cheap) credit, people will keep paying old prices even when they can't really afford it.

      TL;DR: people are stupid.

      --
      ...si hoc legere nimium eruditionis habes...
    10. Re: Let me guess.. by Opportunist · · Score: 5, Insightful

      He isn't trolling, the question is valid. We are eliminating low qualification jobs. Which is by itself a good thing, we don't need 100 farm hands to do what a single machine can do better, faster and more efficiently. But what are we going to do with the 100 farm hands. Putting a shovel into someone's hands and telling him to dig from here to next Wednesday is something you can do to everyone (some handicapped people excluded). If you replace them with a machine, retraining those 100 people to write computer programs is not going to work.

      Jobs that require an IQ of 80 can be done by nearly everyone. Require an IQ of 100 and half the population is excluded. Require 120 and you'll have a quite hard time finding work for a sizable amount of your people.

      And jobs get more "brainy". The low qualification, low intelligence jobs have been eliminated from production. We're now, as you can see in this example, doing the same with services. Where should these people work now? We cannot retrain them all to be programmers, analysts and consultants, they don't have the mental capacity, and we simply don't need so many middle managers, which are equally being eliminated. For the same reason.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    11. Re: Let me guess.. by Opportunist · · Score: 5, Insightful

      This works as long as they're few. It works as long as the majority of your population is not in that group and can actually be simultaneously kept in fear of becoming part of it and being happy that they have something to look down onto as "those lazy bums". That way you keep them busy working for you.

      We're nearing critical mass, though. At some point you'll have to resort to violence to keep them from going at your throat. You can of course do what we do now and pit them against each other, but that bears the threat that at some point someone might emerge that is charismatic enough to unite them when he says "follow me!"

      And then we have Paris 1789, Moscow 1917 or Berlin 1933, depending on how it's going to pan out.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    12. Re: Let me guess.. by BadTuna · · Score: 3, Insightful

      Obviously all these low qualification job seekers aren't on par with your intellectual capacity, yet these people still need a job. When automation eliminates 100k's of jobs, these people will all go on government assistance of some sort. Then you and your shareholders will be endlessly patting yourselves on the back over your profits, all the while endlessly bitching about people on welfares.
      And your 'Trickle Down Economics' fantasy brainwashed into you is the only thing The Gipper ever left for this country.

      --
      Your sig here!
    13. Re: Let me guess.. by Opportunist · · Score: 5, Insightful

      The reason that wasn't a problem back then (and up until now, it didn't happen only once) was that new industries emerged that hoovered up the available workforce.

      When farms needed fewer hands, it was actually a beneficial situation because there was actually a shortage of workers for the at the same time emerging industries. The former farmers flocked to the booming industry towns (with all the ensuing problems), but at least these people did have a job again.

      When industries automated away the conveyor belt workplaces with industry robots, the service industry was quite happy to take the former industry workers and use them as restaurant waiters, supermarket cashiers and fast food restaurant burger flippers.

      The thing is that these jobs were all quite menial jobs, requiring low skill, little training and could be done by pretty much anyone. The skill requirements for raking hay, putting a sheet of metal under a press and pushing a button or carrying a tray of glasses is quite negligible. The problem now is that all those jobs have been automated, and there isn't anywhere to go for those people that isn't either already automated as well or won't be in a few years. Technology is at the point where it can do what someone with a low IQ can do, and since computers can work 24/7 and don't form unions, they are simply more attractive as "employees".

      Up until now, you could argue (and rightfully so) that a new kind of market would emerge that needs those low qualified, low intelligence workers as cheap labor. Today, this simply isn't the case anymore. We have arrived in a time where it is indeed possible to replace some people with a very small script.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
  2. I could use... by toonces33 · · Score: 5, Funny

    I could use some EXTRA BIG ASS FRIES right now.

  3. And in other news by sheramil · · Score: 5, Insightful

    Everyone else on Earth cheers as Wall Street replaced with algorithms capable of morality, compassion and empathy.

  4. Not sure I'm sold on them. by sunking2 · · Score: 5, Insightful

    Spent a month in Madrid and they have them there. Unless you eat at McDonalds way too much per person they are definitely a lot slower. However you can easily have 3 times as many as cashiers. The problem I see is similar to if you've ever seen a 65 year old try to use those touch screen Coke fountain drink machines that give you every combination on Earth. Old people won't like them. I also don't know that it eliminates all that many jobs. It seemed to me that they had just as many people, they were just expediting orders. Not saying they won't work, but questioning them being worthy of a stock boost.

    1. Re:Not sure I'm sold on them. by Dunbal · · Score: 4, Insightful

      If you spend a month in Europe and eat at McDonald's you're doing it wrong.

      --
      Seven puppies were harmed during the making of this post.
    2. Re:Not sure I'm sold on them. by SeriousTube · · Score: 5, Funny

      It's the ones that get out at 4 PM in the morning you have to watch out for.

    3. Re:Not sure I'm sold on them. by drinkypoo · · Score: 4, Insightful

      At any other place the kids objected because the food wasn't like they were used to back home.

      They sound like some grade A spoiled little shits to me, and your British sister sounds like a spectacular enabler. So, just like Americans then!

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    4. Re:Not sure I'm sold on them. by captaindomon · · Score: 3, Informative

      Doesn't sound like you have kids or have ever traveled with kids. The point with kids is to measure how much you force them to adapt to. You want the kids to enjoy their trip, just like you do. There is give and take for how much weirdness you can put them through and still have them on solid enough footing to learn from the trip. Sometimes two weeks into a trip, you need some McDonald's to give them some comfort. Kids are awesome! But they're not adults, and adults that don't have kids don't understand that.

      --
      Just because I can hook a shark from a boat, I do no offer to wrestle it in the water.
  5. been there, done that . . . by swell · · Score: 5, Insightful

    Several fast food chains had those kiosks many years ago. They were ignored by customers who went to the counter anyway. This excites investors because they have never been in a fast food joint. They didn't see the failed system of the past. They have no clue how efficient current employees are. They think that laying off employees is the road to big profit.

    Does anybody here see a future where food and drinks served by robots will be more attractive than what we have now? Isn't the personal service a large part of why we go out to eat and drink?

    --
    ...omphaloskepsis often...
    1. Re:been there, done that . . . by Anonymous Coward · · Score: 4, Interesting

      Personal service (and food presentation/quality) can certainly be a large part of why people go out to eat and drink - at proper restaurants.

      At fast food (aka "gimme my awful, disgusting tasting, but dirt cheap burger right now!") - not so much.

    2. Re:been there, done that . . . by Kjella · · Score: 5, Informative

      Isn't the personal service a large part of why we go out to eat and drink?

      What personal service?
      "I'll have a <size> <menu> with <soda>"
      "Anything else?"
      "No, that's it"
      "That'll be <price>"
      *pay*
      *wait*
      *eat*
      *leave*

      If you go to a fast food joint it's probably because:
      a) You're socializing with somebody not on the payroll
      b) You're hungry and want a cheap, quick bite
      c) You can't be arsed to cook, serve and clean
      d) You're far from home and need to eat out

      None of those particularly need a human element, sure it's practical... but if you added even a tiny service fee for a human to do it, I think you'd see 95% self-service orders.

      --
      Live today, because you never know what tomorrow brings
  6. Re:Time for a $20 minimum wage. by Jason1729 · · Score: 4, Interesting

    Ontario has a $15 minimum wage coming in. Last time I was at Starbucks, all the employees were panicking they're going to lose their jobs.

  7. If only we had machines to dispense money by zerofoo · · Score: 5, Interesting

    Then we could get rid of all the tellers at banks!

    Someone should make this.

    1. Re:If only we had machines to dispense money by ShanghaiBill · · Score: 4, Interesting

      ATMs coupled with internet banking have substantially reduced the need for bank tellers.

      Wrong. The number of human tellers has gone up. Prior to ATMs, human tellers mainly took deposits and dispensed cash. After ATMs and Internet banking, tellers do higher level tasks like setting up accounts, helping with mortgage applications, etc. This makes each teller more profitable, and thus banks have employed more of them.

      When more efficient use of a resource leads to greater demand, it is an example of Jevon's Paradox.

  8. Ontario has healthcare for all so even at $0 hr I by Joe_Dragon · · Score: 4, Informative

    Ontario has healthcare for all so even at $0 hr I still get a doctor and can walk into the ER and not face 100K bill.

  9. Re:Time for a $20 minimum wage. by fluffernutter · · Score: 5, Insightful

    I'd rather live on welfare than have a minimum wage job.

    That's primarily the reason why so many people are stuck on welfare. The only thing available to you to come off welfare is a minimum wage job, and it's getting worse and worse each year. As automation increases, even these jobs are gone and the welfare pit gets even deeper.

    --
    Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
  10. Canada is on another planet, in the future by mykepredko · · Score: 5, Interesting

    We've had the kiosks in Canadian McDonald's for at least a year now and:
    - It's a much nicer way to order, no lines and no shouting to be heard
    - No worries that the clerk screws up your order
    - There doesn't seem to be less staff behind the counter, just more of them filling orders rather than taking them
    Overall, it works well enough that we prefer going to McDonald's.

    When it comes to dining payment technology, it seems like Canada is light years away (as well as well into the future) than the US. Payment is made at the table with chip reading cards that take debit or credit and we have had the McDonald's kiosks and Canada's economy hasn't collapsed.

    Yet when these things are talked about in the US, it seems like they are job killing ideas coming from the devil himself.

    --
    Mimetics Inc. Twitter
  11. Good! by slasher999 · · Score: 3, Insightful

    There's your $15/hour minimum wage. Certain groups wanted this, now here it is. Good luck kids getting that first job to learn how to have a job so you can go out and get a real one.

  12. Re:See what happens when strikes for $15/hour happ by sound+vision · · Score: 4, Insightful

    What's the alternative? No strikes, and they still get replaced with machines a couple years later?

  13. Japan has been doing this for a long time already. by Mr307 · · Score: 3, Insightful

    Ticket style, vending machine style, and probably kiosks too, who knows.

    I'm not sure how long this has been common there but it seems like quite a while.

    Random sample:
    http://jpninfo.com/31417

  14. You can't live on welfare by rsilvergun · · Score: 3, Insightful

    I've had family who sorta tried (illness in the family made it impossible for the single parent to work) and you get about $200/mo if you're destitute with a note from a doctor saying you're a full time caregiver for a sick relative. There's no housing assistance to be had either. What little there is has 8 year wait lists.

    I don't know if the dole ever existed in America, but I can sure as hell tell you it doesn't now. While I'm on the subject there's no such thing as welfare queens either. UBI would be nice, but I don't see us getting it because of the aforementioned welfare queens. That myth's got legs and no amount of evidence seems to kill it.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
  15. "living" Minimum wage by s.petry · · Score: 3, Insightful

    Ask the student how important it is to have minimum wage jobs be paid a "living" wage.

    Yup, society at present is very F'd up. Nope, communism/socialism won't fix anything, in fact it does the opposite.

    --

    -The wise argue that there are few absolutes, the fool argues that there are no probabilities.

  16. Re:Time for a $20 minimum wage. by phantomfive · · Score: 4, Insightful

    It should be mentioned that if you get a job, even the lowest paying job around, then you lose your welfare. So by getting a job, people get less money than they would on welfare.

    --
    "First they came for the slanderers and i said nothing."
  17. Curse of the Invisible Hand. by Thud457 · · Score: 3, Insightful

    Hey, I'm sure all those cashiers will retrain to be lawyers and doctors, thusly increasing their earning potential. Everybody wins! /S

    --

    the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff