Wendy’s Serves Up Big Kiosk Expansion As Wage Hikes Hit Fast Food . . . but progressives are skinning the low wage employees in the pursuit of their religious beliefs. More below! "Wendy’s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.
It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes. McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion. Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.'" Soon, 95% of Wendy's stores will be franchises not company stores. These stores make good money but the massive minimum wage inflation we are about to experience in some jurisdictions will eat most, if not all of these profits. These employers will have no alternative but to either raise prices, cut costs, or close. This market is particularly price sensitive. Expect any price increases to be met with revenue declines. Millions of people truly believe that raising the minimum wage to $15 will result in millions of workers receiving a large wage increase, and a living wage . . . Pink slips, increased automation, and price increases are all likely on the board. This will most hurt the people earning a bit more than the new minimum wage since they will not see their wages rise, but they will see costs rise. This economic group is the lower middle class, and the working class. These new minimum wages are being raised on the backs of these people. I wonder if they will like this? The minimum wage backlash will come from the lower middle class, and the working class . . . Of course, the employers understand that if they have no workers, they are completely insulated from these capricious wage increases. It seems likely that the next step is isolated automation of the most replaceable jobs. The step after, however, will be more formidable. I expect the automation to not just continue in response to wage pressures, but to outstrip wage pressures. These employers are beginning to feel like everything is simply being stacked against them at every turn. Best eliminate the problem as soon as possible. The problem? Employees. Thanks progressives, you have finally triggered large swaths of the American economy to reduce, or more desirably, eliminate employees. Wendy's will automate, the franchisees will continue to seek more ways to automate. In the end, we will likely find many of these restaurants are little more than a big box outside of the grocery store, like the Redbox units we see today. Few employees, low maintenance, low prices, and reasonable profits. And none of these shenanigans:
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