Wendy's Ordering Kiosks

Alpha8472
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Wendy's Ordering Kiosks

Post by Alpha8472 »

Wendy's has announced that they are going to start adding kiosks to their restaurants so that they will not have to pay an employee to do the cashier job. So far in the U.S. very few chains have added automated kiosks for ordering. Jack In The Box had them in Northern California for a short time a couple of years ago, but they were all removed. The kiosks never were cost effective as the customers ordered less food at the kiosks. Jack In The Box realized that the cashier is better at up-selling or suggesting more food to order. In addition, the employees had to remake many of the orders since customers didn't know how to use the kiosks. Orders were constantly typed in wrong and employees had to throw away the incorrect orders and issue refunds. It was a waste of money.

Wendy's spoke of how the $15 minimum wage is forcing them to speed up the roll out of automated ordering kiosks. Any attempt by lawmakers to help employees will be met by an equal attempt by corporations to eliminate jobs entirely. Try to increase wages, then the corporations will push back and find a way to eliminate jobs. You try to do something good, and it backfires making everything even worse.

Wendy's says it is not forcing their franchises to use the automated machines, but provide it as an option in order to cut employees and increase profits.
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Re: Wendy's Ordering Kiosks

Post by pseudo3d »

Alpha8472 wrote:Wendy's has announced that they are going to start adding kiosks to their restaurants so that they will not have to pay an employee to do the cashier job. So far in the U.S. very few chains have added automated kiosks for ordering. Jack In The Box had them in Northern California for a short time a couple of years ago, but they were all removed. The kiosks never were cost effective as the customers ordered less food at the kiosks. Jack In The Box realized that the cashier is better at up-selling or suggesting more food to order. In addition, the employees had to remake many of the orders since customers didn't know how to use the kiosks. Orders were constantly typed in wrong and employees had to throw away the incorrect orders and issue refunds. It was a waste of money.

Wendy's spoke of how the $15 minimum wage is forcing them to speed up the roll out of automated ordering kiosks. Any attempt by lawmakers to help employees will be met by an equal attempt by corporations to eliminate jobs entirely. Try to increase wages, then the corporations will push back and find a way to eliminate jobs. You try to do something good, and it backfires making everything even worse.

Wendy's says it is not forcing their franchises to use the automated machines, but provide it as an option in order to cut employees and increase profits.
For too many parts of the country a $15 minimum wage is too high to be economically sustainable. The sad thing is, it's not big corporations like Wendy's or McDonald's to be threatened by this, it's smaller businesses. (And if the economy is screwed up enough that grown adults with children have to work fast food, then raising costs like that isn't going to help).
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Re: Wendy's Ordering Kiosks

Post by veteran+ »

pseudo3d wrote:
Alpha8472 wrote:Wendy's has announced that they are going to start adding kiosks to their restaurants so that they will not have to pay an employee to do the cashier job. So far in the U.S. very few chains have added automated kiosks for ordering. Jack In The Box had them in Northern California for a short time a couple of years ago, but they were all removed. The kiosks never were cost effective as the customers ordered less food at the kiosks. Jack In The Box realized that the cashier is better at up-selling or suggesting more food to order. In addition, the employees had to remake many of the orders since customers didn't know how to use the kiosks. Orders were constantly typed in wrong and employees had to throw away the incorrect orders and issue refunds. It was a waste of money.

Wendy's spoke of how the $15 minimum wage is forcing them to speed up the roll out of automated ordering kiosks. Any attempt by lawmakers to help employees will be met by an equal attempt by corporations to eliminate jobs entirely. Try to increase wages, then the corporations will push back and find a way to eliminate jobs. You try to do something good, and it backfires making everything even worse.

Wendy's says it is not forcing their franchises to use the automated machines, but provide it as an option in order to cut employees and increase profits.
For too many parts of the country a $15 minimum wage is too high to be economically sustainable. The sad thing is, it's not big corporations like Wendy's or McDonald's to be threatened by this, it's smaller businesses. (And if the economy is screwed up enough that grown adults with children have to work fast food, then raising costs like that isn't going to help).
The $15 minimum wage is not too high and is economically sustainable.

If a "business" cannot provide a living wage then that business model is flawed and perhaps that business sector needs a market correction.

Most businesses fail because of incompetence and/or failed business models. They do not fail because of wages or paying their employees "too much".

There are powerful urban legends (if you will) that promulgate that businesses fail because of wages, benefits, unions, etc.. Overwhelmingly, that is not true but it is exceedingly easy to use those favored excuses instead of looking in the mirror.
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Re: Wendy's Ordering Kiosks

Post by storewanderer »

All I know is look at how (insert name of franchise here) minimum wage paying fast food place is run and look at how In N Out is run. Compare the cleanliness, compare the assembly and temperature of the food. It is a world of difference and the great experience at In N Out is a direct result of their paying higher wages than most of their direct hamburger fast food competitors.

But In N Out isn't paying $15/hr... they are in the teens but not $15. I think it is up to the market to dictate wages. I am confident the new $15/hour bar will not change how the poorly run places are run much. Those that pay minimum wage, whatever it is, will get minimum effort. Places like In N Out and Starbucks will continue to pay above their direct competitors and will continue to execute better and have higher unit volumes than their direct competitors. Prices will likely rise and how exactly it will all shake out as far as customer traffic remains to be seen.

I also have a problem with saying minimum wage is $15/hr in San Francisco, CA and saying it is also supposed to be $15/hr in a place like Tulsa, OK. Living costs and other factors in both places are radically different and it does not make sense for them to have the same minimum wage. Most of the people protesting for $15/hr national minimum wage in large cities have never even been to a place like Tulsa or understand the economics there are far different (way lower cost of living).

The main result as noted will be a market correction. Some businesses with shaky business models that counted on paying $7/hour will end up closing and the $7/hour jobs will be lost as a result. How big of a loss that is, that is debatable.

I'd rather just see the market wash out poorly run businesses but yes a lot of businesses slide by on minimum wage labor that would fail if the cost of labor rose to $15/hour. And yes a lot of those businesses are leeching off of the government by not paying their employees above minimum wage and causing the employees to have low enough income to qualify for various government assistance programs. I'd like to see some retooling there in some way. But my concern is once the minimum wage goes to $15/hour and various associated costs rise as a result, then the thresholds for the assistance programs will increase and we will be back where we started with $15/hr people now on assistance programs and inflation simply fueled by this whole thing.

As far as fast food ordering kiosks go, they've come and gone from both Jack in the Box and Carl's Jr. in the US. McDonalds has deployed kiosks in tons of locations worldwide and usage is mixed depending on location. I have seen kiosks in Elko, NV getting no use at all and when I tried to use one it would charge me $1.89 for the large drink rather than the advertised $1 and I had to go to the regular register; upon asking the manager how to do the $1 drink on the kiosk she said, "those don't work well just order here next time." Conversely in San Francisco, CA the McDonalds kiosks (which could do the $1 drink) were being used by almost every customer; there was a line for the 8 kiosks yet the cash register with one employee standing there was not even getting steady traffic. I find the McDonalds kiosk to be cumbersome to navigate with all the pictures and "scrolling" up and down and around to see the menu. Jack in the Box kiosks were breaking so often they got tired of that and removed them all. I have no idea why Carl's removed its kiosks.
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Re: Wendy's Ordering Kiosks

Post by pseudo3d »

Minimum wage = minimum effort most of the time, and I would hate to pay out the nose for a fast food meal and still have the customer service be rude and incompetent. It's also about how much money companies have to generate in revenue for jobs to be worth it, and no one is going to like it if they have to lose their job so their co-workers can get a pay raise (all things being equal).

Keeping in track with the "how much is your job worth", I've always found it interesting that employees in busy, high-volume stores (you, know, the ones near office buildings, airports, and the like) get generally paid the same amount for employees in not-busy stores that are profitable but don't make nearly the volume as higher volume stores do.
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Re: Wendy's Ordering Kiosks

Post by kr.abs.swy »

From an economic standpoint, this is exactly what you would expect to have happened. If one of your input costs goes up, you do everything you can to substitute away from that input. If base employee wages go from $7.25 to $15, you're going to do everything you can to cut employees. It is basic economics that minimum wages skew how much labor a business chooses to employ, just like an increase in prices for any input will skew the quantity of that input demanded. Whether you are willing to accept those outcomes in order to try to achieve a social goal is a separate conversation that is clearly being answered differently in different areas of the country. If the cost of electricity goes up, you probably set the thermostat a bit lower. If the cost of gas goes up, you try to consolidate trips. If the cable company raises your bill, you give serious thought to a Netflix-only existence. If Wendy's has to pay more for employees, they "hire" more machines instead. It is truly Economics 101.

If the cost of labor goes up, the restaurant will either raise prices or rework the operating model to compensate (or close down). You are going to see both in these $15 minimum wage areas (you definitely see that prices are noticeably higher at restaurants in Seattle, for example). It goes back to the simplest economics concept around: supply and demand curves.

Sheetz has been using ordering screens for its MTO program for years. People absolutely figure out how to use these things. If you are putting in a special order, sometimes it's preferable because you can double check that everything was entered correctly (hold the sauce, add olives, whatever).

Saying that businesses don't fail because they pay employees too much really doesn't pass the smell test. If the company I work for suddenly doubled all wages, it would fail very quickly. It's like saying that businesses don't fail because they pay too much for inputs. Of course they do. Labor is an input and businesses can fail for paying too much for it. Whether you want to blame that on the fact that wages were too high or that the model wasn't sustainable could be considered a matter of semantics. Redbox wouldn't work if it had to have a person manning every single machine every single day. But they have automated the concept. If you step back and think about it, what Redbox does isn't any different from what Wendy's is doing. It just catches our attention because Wendy's is reducing front-line cashiers while Redbox never had them in the first place. ATMs reduce the number of people staffing bank branches, but we accept that. Banks today wouldn't be viable if they suddenly eliminated all ATMs and had to hire additional tellers at each branch.
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Re: Wendy's Ordering Kiosks

Post by Brian Lutz »

When I was in Utah not too long ago I saw that McDonald's restaurants there had begun using ordering kiosks, although they didn't seem to be replacing any employees just yet. I don't think I've ever seen a Wendy's with more than one cashier at a time on the front end, even during rushes.
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Re: Wendy's Ordering Kiosks

Post by BillyGr »

Brian Lutz wrote:When I was in Utah not too long ago I saw that McDonald's restaurants there had begun using ordering kiosks, although they didn't seem to be replacing any employees just yet. I don't think I've ever seen a Wendy's with more than one cashier at a time on the front end, even during rushes.
Most of them don't as that is they way the stores were designed (single line with everyone moving through sequentially).
There was one newer store locally that had a slightly different setup, with one line that was more angled, then had a couple registers where whichever one was available would call the next person in line to go there and then the cashier would also help assemble orders, more like many other fast food places do - that location has closed (but not for that reason, I don't believe). Not sure how many others were built this way.
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Re: Wendy's Ordering Kiosks

Post by storewanderer »

In Canada I've seen self ordering kiosks at A&W (not sure who owns those but I don't think these are the ones previously affiliated with YUM) and at McDonalds.

Not sure about A&W but the McDonalds ones are the same as in the US except they have a different pinpad. I prefer these little pinpads all the merchants up here in Canada use; all of the stores accept Contactless/Tap and the pinpads work quickly. I see tons of customers using Tap cards and lines move very quickly. Unlike the cumbersome things in the US... slow, Contactless/Tap barely works... really a sorry state of affairs.

Wendy's single register set up always seemed to go efficient when it was staffed properly (typically one person on register, one person on drink/frosty/chili, one on fries, and someone to present orders.

Speaking of Wendy's, they seem to have a bit of a problem on food temperature; the burgers are routinely lukewarm at best. I notice they hold the burgers on the (open air) grill after cooking, on a part where I assume the heat is turned down. I think they need a better way. Their product actually tastes quite good but the temperature ruins it.
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Re: Wendy's Ordering Kiosks

Post by Groceteria »

Arby's did this in Bay Area locations in the early/mid 1990s. It didn't last, but the touch-screen technology was not as ubiquitous (and therefore was probably off-putting fro some) at the time.
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