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Bad News for Staff as California Fast Food Chains Discover Ways to Bypass Raising Minimum Wages

Bad News for Staff as California Fast Food Chains Discover Ways to Bypass Raising Minimum Wages
Source: Pinterest

Bad News for Staff as California Fast Food Chains Discover Ways to Bypass Raising Minimum Wages

Source: Pinterest

On April 1, California introduced a $20 minimum wage, which has caused chaos in the fast food business. 

Many employees now work fewer hours, and others have lost their jobs. Eateries are not left behind as they also struggle with the rising operational costs.

Burger King on a Fast Track to Digital

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Harsh Ghai oversees 140 Burger King outlets on the West Coast. He is driving the adoption of technology.

He is installing digital ordering kiosks, which are happening more quickly than expected. “We have kiosks in probably about 25 percent of our restaurants today,” Ghai added. 

A Robotic Change?

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Digital kiosks are becoming common at fast-food restaurants. The main reason for this is the need to cut labor expenses. 

The shift to automation does not only cut cost savings but is also needed for survival. This is because when operating costs rise, menu prices cannot be raised sufficiently.

The Double-Edged Sword of Wage Increases

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Higher wages were meant to improve worker welfare. However, this has ironically resulted in job cuts in the fast food industry.

Such negative effects show how challenging it is to balance providing a fair wage and maintaining viable employment levels.

Layoffs Loom as Wages Climb

Source: Yahoo News

The increase in the minimum wage also pushed fast food restaurants such as Pizza Hut and Round Table to reduce their staff.

This stark reality severely tests the purpose of pay rises. It directly affected the same workers they were intended to benefit.

Balancing Act in Fast Food Economics

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Discussing the financial consequences, Ghai stated, “The majority of that will be absorbed in the inflation of our food costs.”

He further elaborated on the difficulties of reconciling the high costs with the need to make dining affordable.

Navigating Price Hikes with Care

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To avoid upsetting customers, Ghai addressed price hikes cautiously, raising them by 8% to 10% in the past year. 

This rise is a significant jump from the regular annual changes.

Kiosk Expansion on the Fast Lane

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Ghai’s major aim is to quicken the deployment of order kiosks.

“The other 75 percent are going to have kiosks in the next probably 30 to 60 days,” he said. This is indeed a rapid shift toward automation.

A Trend That's Here to Stay

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Self-service technology is not exclusive to Burger King. It is a rapidly growing trend in the industry.

Panera Bread and McDonald’s were the first to lead this change, which has the potential to change the dynamics of the fast food industry.

Higher Sales at the Touch of a Button

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Kiosks have proved beneficial to the business. It increases sales through high orders of premium items.

Katie Fogerty is the CFO of Shake Shack. They also commented on the growing trend: “We see that they add on more premium and higher margin items.”

Changing Fast Food Service

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Chick-fil-A is also pioneering its new ‘grab and go’ idea. This concept eliminates cashiers and relies completely on smartphone pre-orders.

This innovative style does away with traditional order-taking, considerably streamlining the eating experience.

The Automated Future of Fast Food

Source: Pinterest

The fast food sector is rapidly changing. This is driven by economic constraints and technological breakthroughs. 

A shift toward little human interaction could become the new norm. This could also change how consumers receive quick-service meals and transform the industry landscape.