The next time you grab some fast food, don’t be surprised if robots are flipping your burgers and serving your fries.
Fast-food chains have ramped up automation to replace workers who left the service industry in droves during the pandemic. And analysts say the trend could eliminate many unskilled jobs as labor costs increase and a recession looms this year.
Hamburger chain White Castle is installing “Flippy” in 100 restaurants — nearly one-third of its locations — over the next two years. The mechanized arm operates a french fry station, moving baskets of frozen potatoes in and out of boiling oil.
“Team members are grateful,” Jamie Richardson, a White Castle vice president, told The Washington Times. “Flippy works the fryer proficiently and is appreciated by the teams working in the restaurants.”
The Ohio-based franchise is also partnering with Mastercard to develop drive-thru menu boards that use artificial intelligence to streamline wait times.
“We’re continuing to test and learn,” Mr. Richardson said. “As a family-owned business, we need to make every penny count, and automation is a way to empower our teams to focus on our heart for hospitality to serve up hot, tasty and affordable food to our customers.”
Sonic, McDonald’s and Checkers are working to develop AI order-taking systems among other innovations like self-service table kiosks.
A McDonald’s test restaurant near Fort Worth, Texas, has launched the first “Order-Ahead Lane.” The separate drive-thru lane lets customers who use the McDonald’s app pick up their orders more quickly from a conveyor belt — but officials insist it’s not replacing human employees.
“We anticipate this restaurant format necessitating a comparable number of team members to a traditional store based on initial testing,” a McDonald’s spokesperson said in an email. “There is interaction between customers and the restaurant team when picking up orders via the food and beverage conveyor and the restaurant team may also support guests using the self-order kiosks.”
Four out of five franchises have experienced pandemic-related labor shortages and “nearly all” say finding qualified labor is their biggest challenge, according to a survey released last year by the International Franchise Association.
Although the restaurant industry added nearly 2.2 million jobs over the last two years, it still finished last year with 462,000 fewer jobs than it had before the pandemic in February 2020, according to the National Restaurant Association.
More than eight in 10 operators told the restaurant trade group in a survey that upgrading technology provides a “competitive advantage” as inflation challenges them to cover rising food and labor costs.
“In this kind of economic environment, typical operators don’t have much margin for error,” said Hudson Riehle, the restaurant association’s senior vice president of research. “With major input costs escalating, they can make changes to align with local consumer demand while realigning operations for longer term growth.”
There were 10.5 million job openings in November, including more than 1 million in retail, the Bureau of Labor Statistics reported.
What’s more, about 7 million U.S. jobs will “not be needed” as unemployment rises to a “typical recession rate” this year, according to Hans Dau, CEO of the Mitchell Madison Group. Eliminating unskilled positions with technology will address much of the current labor shortage, the global management consultant said in an email.
“The labor shortage will normalize as the Federal Reserve engineers a recession in 2023 with significantly rising unemployment, while companies protect their profit margins by automating even more,” Mr. Dau wrote. “This could put quite a bit of pressure on the lower end of the labor market in sectors such as hospitality and construction. Significant advances in artificial intelligence and machine learning will result in white-collar jobs feeling the pressure as well.”
Minimum wage hikes also have added pressure on companies to eliminate unskilled positions. A recent analysis by accounting firm Wolter Kluwer found that 26 states will raise their minimum wage this year.
Increased labor costs resulting from the hikes will push restaurants to hire fewer workers at higher salaries, accelerating the trend toward self-service technology, economists say.
“McDonald’s is already experimenting with automation,” said Charles Steele, chairman of the Economics Department at Hillsdale College. “We will see a lot more of this in response to minimum wage increases.”