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Minimum-Wage Blowback - Wendy's To Employ Self-Service Kiosks At 6,000 Locations
05-13-2016, 09:01 PM,
#1
Minimum-Wage Blowback - Wendy's To Employ Self-Service Kiosks At 6,000 Locations
Minimum-Wage Blowback - Wendy's To Employ Self-Service Kiosks At 6,000 Locations

<p><a href="https://mishtalk.com/2016/05/13/wendys-to-employ-self-service-kiosks-at-6000-locations/"><em>Submitted by Mike Shedlock via MishTalk.com,</em></a></p>
<p>In direct response to higher wage prices and the firming of commodity prices,<em><strong> Wendy&rsquo;s is going to install self-service ordering kiosks at 6,000 locations. McDonald&rsquo;s is expected to follow at a slower pace.</strong></em><span id="more-37746"><em><strong> </strong></em></span></p>
<p>Investors Business Daily reports <a href="http://www.investors.com/politics/policy/wendys-serves-up-kiosks-as-wages-rise-hits-fast-food-group/" target="_blank">Wendy&rsquo;s Serves Up Big Kiosk Expansion As Wage Hikes Hit Fast Food</a>.</p>
<blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Wendy&rsquo;s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.</strong></p>
<p>&nbsp;</p>
<p>It will be up to franchisees whether to deploy the labor-saving technology, but Wendy&rsquo;s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.</p>
<p>&nbsp;</p>
<p><strong>McDonald&rsquo;s (MCD) has been testing self-service kiosks.</strong> But Wendy&rsquo;s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.</p>
<p>&nbsp;</p>
<p><strong>All 258 Wendy&rsquo;s restaurants in California, where the minimum wage rose to $10 an hour this year and will gradually rise to $15, are franchise-operated.</strong> Likewise, about 75% of 200-plus restaurants in New York are run by franchisees.</p>
<p>&nbsp;</p>
<p>&ldquo;We are seeing a bit of a softer overall category in April&rdquo; relative to the past two quarters, Penegor said on an earnings call, implying more of an industrywide trend than an issue specific to Wendy&rsquo;s.</p>
<p>&nbsp;</p>
<p>Penegor said the reason for softer growth was hard to pinpoint, 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.</p>
<p>&nbsp;</p>
<p>In addition to self-order kiosks, the company is also getting ready to move beyond the testing phase with labor-saving mobile ordering and mobile payment available systemwide by the end of the year. Yum Brands and McDonald&rsquo;s already have mobile ordering apps.</p>
</blockquote>
<h2><u><strong>Carl&rsquo;s Jr. Investing in Machines</strong></u></h2>
<p>Business Insider reports <a href="http://finance.yahoo.com/news/carl-jr-ceo-predicts-future-203203237.html" target="_blank">Fast-food CEO says he&rsquo;s investing in machines because the government is making it difficult to afford employees</a>.</p>
<blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The 100% automated restaurant, Eatsa, has inspired the CEO of Carl&rsquo;s Jr.</strong></p>
<p>&nbsp;</p>
<p>The CEO of Carl&rsquo;s Jr. and Hardee&rsquo;s has visited the fully automated restaurant Eatsa &mdash; and it&rsquo;s given him some ideas on how to deal with rising minimum wages.</p>
<p>&nbsp;</p>
<p>&ldquo;I want to try it,&rdquo; CEO Andy Puzder told Business Insider of his automated restaurant plans. &ldquo;We could have a restaurant that&rsquo;s focused on all-natural products and is much like an Eatsa, where you order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person.&rdquo;</p>
<p>&nbsp;</p>
<p><u><em><strong>&ldquo;This is the problem with Bernie Sanders, and Hillary Clinton, and progressives who push very hard to raise the minimum wage,&rdquo; says Puzder. &ldquo;Does it really help if Sally makes $3 more an hour if Suzie has no job?&rdquo;</strong></em></u></p>
</blockquote>
<h2><u><strong>Zero Human Interaction Eatsa</strong></u></h2>
<p>Also consider <a href="http://www.businessinsider.com/eatsa-fully-automated-restaurant-chain-2016-2" target="_blank">This is the first fast-food chain in America that requires zero human interaction</a>.</p>
<blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A new restaurant chain called Eatsa is unlike any fast-food chain we&rsquo;ve seen before.</p>
<p>&nbsp;</p>
<p>The restaurant is almost fully automated, functioning like a vending machine that spits out freshly-prepared quinoa bowls.</p>
<p>&nbsp;</p>
<p><strong>When customers enter Eatsa, they order their food at an iPad kiosk.</strong></p>
<p>&nbsp;</p>
<p><strong>Then they wait in front of a wall of glass cubbies, where their food will be appear when it&rsquo;s ready.</strong></p>
<p>&nbsp;</p>
<p>Hidden behind the wall of cubbies, kitchen staff prepare the food.</p>
</blockquote>
<h2><strong>Positions Open!</strong></h2>
<p><a href="https://mishgea.files.wordpress.com/2016/05/wendys-careers.png"><img alt="Wendy's Careers" class="alignnone size-full wp-image-37750" src="https://mishgea.files.wordpress.com/2016/05/wendys-careers.png?w=529" /></a></p>
<p>&nbsp;</p>
<h2><u><strong>State of Affairs</strong></u></h2>
<p>Fast food is not cheap. $15 minimum wages do not help.</p>
<p>It&rsquo;s easy to dismiss Eatsa. It has 10 stores. But it&rsquo;s the idea that&rsquo;s important.</p>
<p><strong>Wendy&rsquo;s is adopting a similar model as best it can, en masse.</strong></p>
<p>Department stores that have massively over-expanded will follow suit.</p>
<p><strong>None of these trends bode well for store expansion or hiring. Layoffs are on the horizon.</strong></p>


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