US fast food chain Wendy’s has admitted that, rather than maintain its current staffing levels at the new minimum wage rate, it will seek to replace staff with self-ordering kiosks and back-of-house automated systems, and cover wage hikes of existing staff by raising its prices.
During a sales call, Wendy’s Chief Financial Officer Todd Penegor admitted that the company will “continue to look at initiatives and how we work to offset any impacts of future wage inflation through technology initiatives, whether that’s customer self-order kiosks, whether that’s automating more in the back of the house in the restaurant. And you’ll see a lot more coming on that front later this year from us.”
CEO Emil Brolick added that “our franchisees will likely look at the opportunity to reduce overall staff, look at the opportunity to certainly reduce hours and any other cost reduction opportunities, not just price. You know there are some people out there who naively say that these wages can simply be passed along in terms of price increases. I don’t think that the average franchisee believes that.”
Last week, California and New York became the first states to agree to a $15/hr minimum wage rise by 2022, with campaigners fighting to have the policy adopted across the United States.