Yes, robots can now take your orders at restaurants, prepare your food, and deliver it to you. And while this new technology harkens back to plenty of science-fiction lore, no, robot dominance in the workplace is not inevitable. Bank of America analyst Sarah Senator said robots in retail are not designed to steal jobs – they will make them better.
“It’s not that they’re necessarily reducing the number of people,” the senator said. Luck. “What’s more, they make these people more productive and happier.”
The senator wrote in a March 11 note that robots working in restaurants are “the vanguard of automation” and could not only make the company money, but also make work more enjoyable.
At Kernel, a vegan fast-food restaurant in New York City, the benefits of automation are already starting to show. Three store employees work alongside a robotic arm that places food in the oven and then sends it to an assembly line so employees can cook it. Employees work with a software development team to program the robot to maximize the team’s efficiency, including synchronizing the arm to pull the burger out of the oven at the same moment the bun is toasted.
“Team members enjoy the experience, and automation creates a better work environment for them, not a worse one,” said Steven Goldstein, president of Kernel. Luck.
The restaurant started hiring four months ago and has only been open for a month, but currently has a 100% employee retention rate, Goldstein said. Fast food industry average staff turnover was 144% in 2021. Employees start at $25 per hour and receive paid vacation and sick leave. The company is developing a stock option plan. And customers don’t seem to be paying for Kernel’s huge investments in its people and technology. His burger is plant-based. 7 US dollarsa dollar cheaper than Shake Shake’s Vegetarian hut.
Kernel is showing the potential to bring robots to the forefront of fast food operations. But is it too early to say that restaurant robots are too good to be true?
The Rise of Retail Robots
Restaurants with automation are not inherently new. Automatic Horn & Hardart 1902, which revolutionized the dining experience by essentially creating a huge vending machine for customers, but the spread Robots with artificial intelligence of course have.
“To some extent, the restaurant industry is a microcosm,” the senator said. “Software has become quite common: computers are used for forecasting, planning and, of course, aggregating, quantifying and analyzing data. But the bigger challenge is actually integrating them or incorporating them into the physical process.”
Although online ordering was introduced in the mid-2000s, innovation and adoption of technology robot couriers in-app orders have been expedited or expanded due to the pandemic, which has resulted in… massive decline employment in the retail and restaurant business.
Buyers further use online orders and automation after the pandemic inspired retailers to engage omnichannel strategies. This model has satisfied consumers wanting to return to brick-and-mortar stores while maintaining the efficiencies created by pandemic-era technology. Some analysts are linking automation to an unexpected boom in economic productivity in the early months of 2021. productivity increased by 5.4%.
“It’s been very, very important for retailers to be able to meet consumer needs at any point in the day or evening,” said Mark Matthews, executive director of research for the National Retail Federation. Luck. “Retailers must be able to meet consumer needs. This has also created a need for retailers to invest in technology.”
Restaurant automation, particularly the introduction of robots, has helped fast food restaurants like Sweetgreen, which have struggled with profitability for years. He presented Endless kitchen automation system in two suburban settlements in 2023 and has already noted the benefits.
According to Sweetgreens with Infinity Kitchen, ticket sales are 10% higher than other stores in the surrounding market. fourth quarter profit. Although Infinite Kitchen cost approximately half a million dollars to develop and install, Sweetgreen is expanding the model to more stores. The company expects a seven-point margin improvement for locations using the system.
“The Endless Kitchen continues to deliver many benefits to our operating model, such as higher throughput, higher order accuracy, portioning consistency and significantly lower employee turnover,” Chief Financial Officer Mitch Rebeck said in the earnings release.
Technology to improve productivity is expensive, as is replacing employees. On average, replacing a departing hourly employee costs a company approximately $1,500 per year. People are holding. High employee turnover also weakens employee morale and can cause employees to burn out as they take over the responsibilities of their former colleague.
There’s also a less compelling argument for keeping employees around even when robots take over some of their routine tasks: Employees are still able to provide a human touch that robots simply can’t, Matthews said.
“Employees can make a difference for retailers,” he said. “Retailers are recognizing that you still need to invest in your workforce, even though consumers want to interact with you or transact in different ways.”
When will the benefits end?
Just because employees now work hand-in-hand with robots doesn’t mean the relationship won’t deteriorate.
According to the National Restaurant Association State of the Restaurant Industry in 2024 report. The senator acknowledges that with more efficient systems and employees no longer having to do menial tasks, it makes sense for employees to start reducing their hours.
Retail workers are still concerned that the presence of robots could cost them their jobs in the future, said Marc Perrone, international president of the United Food and Commercial Workers International Union. Luck.
“It’s kind of ambivalent at this point,” he said. “What we are seeing is a reduction in the front-of-store workforce, and that is a direct result of technology being brought into stores.”
Most UFCW rank-and-file members are workers in food retailers such as grocery stores, not necessarily restaurants, but Perrone said union membership has dropped by 100,000 over the past 15 years as automation has taken over those spaces.
Hershey said in February filing documents with the SEC that it would lay off workers as part of a restructuring that included changing recipes to include less chocolate amid rising cocoa prices as well as investments in automation. Launch of automated pizza production Picnic laid off an undisclosed number of workers last year, with CEO Clayton Wood citing the difficult economic situation.
Perrone isn’t naive about the future of retail involving more automation, but he argues technology won’t help employees if it costs them their jobs.
“Technology can be used to benefit all parties,” he said. “I think there should be a conversation about it before we implement it.”