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Yum! Brands CEO Forecasts Robotics and Automation in QSRs

  

Apr 19, 2017

    

Yum! Brands CEO, Greg Creed forecast that by the mid 2020’s, automation and robotics will be commonplace in QSRs.  He noted that affiliated brands, Pizza Hut, KFC and Taco Bell have established automated ordering kiosks in Shanghai, China and are even using robotic greeters.  Creed compared advances in automation in QSRs to the extensive use of robots in manufacturing.

  

His comments to CNBC follow recent initiatives to raise the rates paid to workers to a minimum of $15 per hour for unskilled work.  In view of the thin margins generated by QSRs, substantial increases in labor costs will force both in-store automation in addition to centralized food preparation in commissaries, trends which are already apparent. The alternative, as in Seattle WA. is the closure of stores.

The U.S. fast food industry was founded on manual labor provided by high-schoolers following a right-of-passage, learning responsibility, punctuality, and interaction with customers and supervisors before going on to college or a career.  Over the past three decades, especially in urban areas, QSR workers have represented an unskilled work force virtually tied into minimum wage occupations.

Chick-fil-A® is the outstanding exception with respect to remuneration, training, motivation and benefits. Since the chain is a private company with a unique philosophy and business model decisions were made by the founder, S. Truett Cathy and followed by his son Dan to invest in store associates. This luxury apparently eludes public-quoted companies in intense competition, which are required to demonstrate growth in earnings on a quarterly basis to maintain EPS and to pay dividends often at the expense of employees.

  
  
 








 
 
Copyright 2017 Simon M. Shane