The cost of raising the minimum wage

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From Ohio's The Columbus Dispatch:

Wendy’s to install ordering kiosks in 1,000 stores this year
Last year, the kiosks were coming. It didn't take them long to get here.

Wendy's plans to install self-ordering kiosks in 1,000 of its stores — about 16 percent of its locations — by the end of the year.

And the reason:

Trimm said the kiosks accomplish two purposes: They give younger customers an ordering experience that they prefer, and they reduce labor costs.

A typical store would get three kiosks for about $15,000. Trimm estimated the payback on those machines would be less than two years, thanks to labor savings and increased sales. Customers still could order at the counter.

And some numbers:

"Last year was tough — 5 percent wage inflation," said Bob Wright, Wendy's chief operating officer, during his presentation to investors and analysts last week. He added that the company expects wages to rise 4 percent in 2017. "But the real question is what are we doing about it?"

Wright noted that over the past two years, Wendy's has figured out how to eliminate 31 hours of labor per week from its restaurants and is now working to use technology, such as kiosks, to increase efficiency.

As labor prices rise, something has to give. Profit margins are minimal in fast food and if they raised the sale price of their food, they would see a reduction in sales.

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This page contains a single entry by DaveH published on February 27, 2017 5:17 PM.

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