McDonald’s announced this week that it plans to replace cashiers with self-service kiosks in all its American restaurants by 2020, a likely response to the “Fight for 15” movement and new technology.
What are the details?
CEO Steve Easterbrook told CNBC this week his restaurant chain will roll out the self-order kiosks in 1,000 new stores each quarter.
He estimated 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. He said about 3,500 restaurants already use the automated machines, or about one-quarter of the McDonald’s U.S. portfolio.
Easterbrook added that 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 reason behind the kiosks? According to Easterbook, 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” on Monday.
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.
What about rising labor costs?
McDonald’s is 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 in unskilled labor like entry-level positions at McDonald’s.
Many states cities and states, especially progressive localities on the West Coast, have answered the call, passing 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.
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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.
So, what will McDonald’s do with workers displaced by kiosks?
Hickey told BuzzFeed only some of the jobs will be replaced with new positions.
“[With] the addition of self-order kiosks, restaurants are transitioning some roles to more customer engaging positions like Guest Experience Leaders and table service,” she explained.