McDonald’s announced this week that it plans to replace a number of cashiers with self-service kiosks in all its American restaurants by 2020. This is in response to the “Fight for 15” movement and demands for higher wages, along with advances in technology.
CEO Steve Easterbrook told CNBC that his restaurant chain will roll out the self-order kiosks in 1,000 new stores each quarter. Many Americans are thrilled and can’t wait for the innovation. Minimum wagers… not so much.
Easterbrook estimates that half of the 14,000 U.S.-based stores would have the kiosks by the end of 2018 and every location would utilize the technology by 2020. Approximately 3,500 restaurants currently use the automated machines. That’s about one-quarter of the McDonald’s U.S. portfolio. He also said that the McDonald’s locations in Canada, the United Kingdom and Australia are already “fully integrated” with the technology, while a majority of locations in France and Germany use it.
The CEO says that McDonald’s has discovered customers “dwell” at the self-ordering stations, meaning they also buy more. “What we’re finding is when people dwell more, they select more. There’s a little bit of an average check boost,” he said on CNBC’s “Squawk on the Street.” However, it is an absolute certainty that the “Fight for 15” movement had something to do with this. As liberals demanded a minimum wage increase to $15 an hour, fast food restaurants like McDonald’s came to the realization that it would be cheaper to go the technology route, amortizing the cost over a few years and eliminating costly jobs. It’s a windfall for business and a cold splash of reality to liberals.
McDonald’s spokesperson Terri Hickey explained to BuzzFeed News that redesigned restaurants will still have cashiers, but “kiosks provide another option for customers to order and pay. We’re finding with kiosks, customers tend to feel less rushed, take their time, browse the menu, and often order more.” In addition to self-order stations, McDonald’s is exploring more food delivery methods, including ordering through a mobile app and delivering food on Uber Eats. So, you will be able to use your phone or a computer to order, then pick up your food, or have it delivered to you for a fee.
Easterbrook stated that the restaurant chain was simply adding more options: “If you think about only two years ago, if you were a customer there were two ways you can get served at McDonald’s. You walked to the front counter and line up and take your drink and find a table or you go through the drive through. We’re introducing many options. They can order through mobile, they can come curbside and we’ll run it out as well as the existing traditional ways. You can pay in different ways and customize your food in different ways. I think we’re trying to add more choice and variety.”
From the very beginning, McDonald’s has been one of the biggest targets of the “Fight for 15” movement, whose goal is to raise the minimum wage to $15 per hour nationwide, even for unskilled labor at entry-level positions for McDonald’s. Many cities and states, especially progressive localities on the West Coast, have passed laws mandating a $15 per hour minimum wage, through gradual hikes. The rising labor costs associated with increased minimum wages have undoubtedly forced McDonald’s and other fast food chains to utilize self-service stations. They simply can’t pay that kind of wage and make a profit. It would drive them out of business.In the first quarter of the year, McDonald’s payroll and employee benefits were 30.2% of sales, up from 27.8% during the same period in 2017.
Not all jobs will be replaced by kiosks. Some will remain intact, but this is going to be a huge reduction in jobs at fast food outlets. Technology is here to stay and unfortunately for fast food workers, it will replace most of them. Instead of $15 an hour, they will get zip. Not exactly the progress or change they had hoped for I bet. “[With] the addition of self-order kiosks, restaurants are transitioning some roles to more customer engaging positions like Guest Experience Leaders and table service,” Hickey explained.
People will pay a little more to not deal with other people and for their orders to be done right and quickly. This is a change that has been coming for awhile, but one I personally welcome. And these kiosks speak most languages – you just choose one. So, for instance, here in Oklahoma, we’ll be able to order in English instead of sign language with those who speak Spanish.
Fast food workers certainly won’t be the last victims of technology. Just as the industrial revolution swept America, a technological revolution has now arrived. Buckle up.
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