Flippy the robot, who flips burgers at a Caliburger restaurant in Los Angeles, could be a taste of things to come in the fast-food industry.
- Fast-food chains are struggling to hire workers and reduce turnover.
- Now, many brands are turning to robots for solutions.
- "The only way to truly deal with this is to reduce the number of labor hours that are required to run your concept," BTIG analyst Peter Saleh told Business Insider. "And, I feel like the only way to really do that is to implement technology."
The "war for talent" might be the spark restaurant chains need to shift the industry's drive towards automation into top gear.
Executives and analysts alike are bracing for the impact of the battle to fill positions and hire competent employees in the restaurant industry. With unemployment low and more options available to entry-level workers than ever before, many chains are struggling to hire and retain talent.
"For some brands, it's actually capping their sales potential," John Hamburger, the founder of industry trade publication Franchise Times Corp., told Business Insider.
"If you can't find enough people to fill a shift, you just can't possibly do the potential volume of what some of these restaurants are supposed to be doing," Hamburger continued. "There's a lot of brands that are having a lot of trouble trying to find workers."
A number of chains are trying to beef up their benefits or raise their workers' pay in order to cut down on turnover and attract talent. But, according to BTIG analyst Peter Saleh, there is just one long-term solution to solve the problem.
"The only way to truly deal with this is to reduce the number of labor hours that are required to run your concept," Saleh said. "And, I feel like the only way to really do that is to implement technology."
Square
These Shake Shack payment kiosks are powered by Square on the backend.
Automation can take a wide range of forms at restaurant chains, including mobile order-and-pay, ordering kiosks, and automation in the kitchen.
Shake Shack, Taco Bell, and McDonald's are all rolling out ordering kiosks across the country. Arby's has installed ovens that automatically roast beef, while Dunkin' Donuts has roasters that independently grind coffee, the Wall Street Journal reports. And, mobile ordering has become the norm across the industry, with chains from Chick-fil-A to Starbucks incentivizing customers to download the apps.
"It can be a natural support for running the business," Dunkin' Donuts' then-CEO, Nigel Travis, said of automation earlier this year.
If all Dunkin' Donuts customers ordered and paid using their mobile phones, Travis said, the chain would be able to cut 30% of labor in stores. However, according to Travis, Dunkin' Donuts franchisees are already struggling to fill open positions. Automation therefore doesn't necessarily mean workers would be fired, but instead that stores would be able to operate even with current unemployment rates.
It can also help protect companies' bottom lines as minimum wages increase in states across the US. Red Robin and Jack in the Box both announced earlier in 2018 that they planned to cut labor costs through automation.
Saleh says that BTIG is keeping tabs on companies that stay ahead of the curve by using tech in the war for talent.
"The labor line is really the killer right now," Saleh said.