Fast-food restaurant chain McDonald’s shares have reached record highs last week, gaining 26 per cent, as the company announced a new round of automation at 2,500 of its outlets in the US.
The global icon of American enterprise says it will replace cashiers with digital ordering kiosks and introduce mobile ordering at a total of 14,000 locations across the US.
The extensive automation plan is part of the company’s “Experience of the Future”, according to a report on CNBC.com.
CNBC quotes financial expert Andrew Charles from Cowen, who writes in a note: “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.
“Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps [basis points] contribution to US comps [comparable sales].”
Charles adds: “MCD has done a great job launching popular innovations within the context of simplifying the menu, while introducing more effective value initiatives that have recently begun to improve the brand’s value perceptions.”
In a statement responding to CNBC’s story, McDonald’s says: “Our CEO, Steve Easterbrook, has said on many occasions that self-order kiosks in McDonald’s restaurants are not a labor replacement.
“They provide an opportunity to transition back-of-the-house positions to more customer service roles such as concierges and table service where they are able to truly engage with guests and enhance the dining experience.”
McDonald’s is said to be the world’s largest restaurant chain, with approximately 40,000 outlets in 120 countries. The company directly employs an estimated 375,000 people, but when staff at franchise restaurants are included, the number rises to more than 1.5 million.
McDonald’s restaurants are already highly automated, with relatively few employees per restaurant. Nonetheless, the company has been testing restaurants run entirely by robotics and automation technologies.
McDonald’s opened a restaurant in Phoenix, Arizona which only employed robots. And the company did announce plans to open no less than 25,000 robot-run restaurants by the end of 2016, according to CNN.
And although that doesn’t seem to have happened by the time specified, there’s no obvious reason why it can’t over the course of this year or next.
McDonald’s shareholders have been grumbling that the company has not been making as much profit as it might, and company managers have stated their concern over the campaign to introduce a minimum wage of $15 across the US.
Paul Horner, a spokesman for McDonald’s, says: “With the increasing demand for a minimum wage of $15 an hour and the protests getting worse every day, this is something we have to implement.
“Plus with the tremendous margin of human error, poor hygiene, lack of education, laziness, as well as the recent advancements in artificial intelligence it just make sense to automate our restaurants now rather than later.”
McDonald’s is not the only fast-food outlet increasing its level of automation. Wendy’s is also reported to have launched a program which will see the introduction of 6,000 robotic servers.
The program will see self-serve kiosks at 1,000 Wendy’s restaurants by the end of this year, according to the Los Angeles Times.
Automated food vending machines have been around for decades, but more sophisticated versions of them have been too expensive to introduce on a large scale, until now.