Wanna get our awesome news?

Subscribe to our newsletter!


Actually we won’t spam you and keep your personal data secure



Can robots solve the US QSR’s wage woes?


The battle in the US restaurant industry for increased minimum wage is bringing technology and automation into the equation as brand owners look to balance bleeding bottom-lines, competition and cost.

By Lydia DePillis

Crowded. That’s how Ed Rensi remembers what life was like working at McDonald’s in 1966. There were about double the number of people working in the store – 70 or 80, as opposed to the 30 or 40 there today – because preparing the food just took a lot more doing.

“When I first started at McDonald’s making 85 cents an hour, everything we made was by hand,” Rensi said – from cutting the shortcakes to stirring syrups into the milk for shakes. Over the years, though, ingredients started to arrive packaged and pre-mixed, ready to be heated up, bagged and handed out the window.


The industry could be ready for another jolt as a ballot initiative to raise the minimum wage to USD 15 an hour nears in the District and as other campaigns to boost wages gain traction around the country. About 30% of the restaurant industry’s costs come from salaries, so burger-flipping robots – or at least super-fast ovens that expedite the process – become that much more cost-competitive if the current federal minimum wage of USD 7.25 an hour is doubled.




The advent of fast-food chains may have ushered in an era of new efficiencies, but the industry as a whole has largely been resistant to cuts in labour. According to the Bureau of Labor Statistics, since 1987, labor productivity in ­limited-service restaurants has grown at a rate of only 0.3% per year, which is low compared with most other industries.

The market research company IBISWorld has calculated that the average number of employees at fast-food restaurants declined by fewer than two people over the past decade, from 17.16 employees to 15.28. And restaurants tend to rely more on labour than other food outlets: According to the National Restaurant Association, dining establishments average USD 84,000 in sales per worker, compared with USD 304,000 for grocery stores and USD 855,000 for gas stations.


Since 1987, US labour productivity in ­limited-service restaurants has grown at a rate of only 0.3% per year, which is low compared with most other industries.






The labour-saving technology that has so far been rolled out most extensively – kiosk and ­tablet-based ordering – could be used to replace cashiers and the part of the wait staff’s job that involves taking orders and bringing checks. Olive Garden said earlier this year that it would roll out the Ziosk system at all its restaurants, which means that all a server has to do is bring out the food.

Robots can even help cut down on the need for high-skilled workers such as sushi chefs. A number of high-end restaurants use machines for rolling rice out on sheets of nori, a relatively menial task that takes lots of time. Even though sushi chefs tend to make more than USD 15 an hour, they could be on the chopping block if servers need to make USD 15 an hour, too.




“You don’t want a USD 15-an-hour person doing something that the person who makes USD 7 an hour can do,” Brewer said. “It’s not downgrading the employees. It’s that the employees become managers of a bunch of different systems. They’ll become smarter and smarter.”

The value of a human touch

Not everybody, however, agrees that machines could make that much of a dent in labour costs. Implementing new systems is expensive, and mistakes can be devastating. And for some concepts, it’s possible that the presence of employees is actually a restaurant’s competitive advantage. Compared with grocery stores and gas stations, many people come to restaurants exactly because they want some human interaction.

Andy Wiederhorn, chief executive of Fatburger – who is testing tablet systems in his sit-down chain, Buffalo’s Cafe – doubts improvements in technology are going to be enough to keep up with the mandated wage increases, especially when actual people can be his best sales tool.





Source: Washington Post

Recommended for you