Tag Archives: McDonalds

A weird week at Wendy’s (and a few thoughts on dynamic pricing)


It was a weird week last week at Wendy’s. First they were talking about introducing dynamic pricing, only to walk it back later: Wendy’s clarifies no surge pricing after CEO ‘dynamic pricing’ comment.

Was this a weird way to get attention? Possibly.  Or possibly some executive had half an idea this was a good idea before the deluge or outrage hit them. (Recommending surge pricing after consumers have been complaining for months and months about food price inflation is a great example of not reading the room. Not to mention people are already annoyed at the cost of fast food these days.)

Look if Wendy’s wants to go with surge pricing, I say good luck with that. (Also good luck with saying “no it’s not surge pricing, it’s dynamic pricing”.) Unlike Uber in bad weather, they don’t have a lock on meals. Anyone with a little knowledge of economics knows people will just substitute them out with other fast food (or a brown bag lunch). Wendy’s does not make Giffen goods. All they are going to achieve is angering their customers.

For a good guide to dynamic pricing, I recommend this. It can be done successfully and lead to greater profit, but you are playing with fire if you are thinking of using it for your business.

Finally some good news for 2020: the McRib is coming back!

Yaaaas. At least in the US, the McRib sandwich from McDonald’s is coming back in December, according to this. I hope and pray it comes to Canada, too. I love that sandwich: saucy, porky, with pickles and raw onions and that bun. Perfection.

Almost a decade ago I came across an intriguing theory as to why McDonald’s sells the McRib only at certain times. I wrote about it, here.

Thoughts on automation, from the WSJ (and me, someone who specialized in automation)

Robots
Christopher Mims has a good piece here that touches on many of the recent arguments concerning automation, here: Automation Can Actually Create More Jobs (WSJ). Well worth reading.

For my own perspective, early in my career my job was automating many of the systems operations tasks in my part of IBM. In one year I automated essentially the work of 10 people. No one lost their job as result, because while it was good to have these activities automated, the activities were not valuable enough to justify hiring people to do the work. Essentially the automation improved the quality of our work. Automation using IT to improve the quality of work is a good use of automation, be that automation be a lowly shell script or very expensive robot with A.I. Quality aside, how the automation affects staff depends on the culture and the makeup of an organization.

There is talk of places like McDonald’s replacing workers with kiosks as a result of a drive by some for a higher minimum wage. First off, McDonald’s are rolling out those kiosks in Canada, too, which makes me think they are going to deploy them regardless of what the minimum wage is. Second, I have used the kiosks a number of times, and they are of a limited benefit to a McDonald’s customer. The kiosks are good if there is a long line for a person to take your order: they kiosks are bad if there is a small line or no line. They are bad because it will take you many more minutes to place your order, due to the kiosk’s user interface. (Try one and you will see.) The kiosks some time will fail to print out your receipt: if you don’t remember your order number, then you have to go in line, tell them what you ordered, and then get your number. Overall the kiosks are not bad: they are especially good if you like to special order. But if the lines aren’t long and your order is standard, skip them and go in line.

Besides that, McDonald’s will still have plenty of staff and likely will for the future. Kiosks can’t cook, can’t pack your order, and can’t clean the restaurant. If you think robots can do that and do it cheaply, you need to learn more about robotics. I can see why McDonald’s and other fast food places need automation: they are constantly trying to retain people while trying to keep costs down. But the notion they are automating to spite people looking for a higher wage is ridiculous. McDonald’s is not going to become a glorified vending machine and they should not try to be. People go to restaurants and coffee shops to socialize and to come in contact with other people, and automation will provide less of that, not more.

As well, smart fast food places will learn that human contact makes for better business (see Starbucks). There are many ways to be successful as a fast food business, and a positive experience in dealing with staff is one of those ways.

Automation changes work. However, how it changes work is complex. It is tempting to assume that it will eliminate all work, but that is too simplistic. In addition, we need to think about work, income, and why we do what we do. Automation can help us do that, and that is one clear benefit of automation.

(Image: link to image.freepik.com)

One of the reasons McDonald’s doesn’t offer more variety…

…is that it’s expensive for the franchisees, as this article shows: McDonald’s franchisees are furious – Business Insider. I hadn’t thought of it from the perspective, but it makes sense. McDonald’s restaurants are just part of a complex food chain (so to speak). Making changes takes an awful lot, and the cost implications are huge. If this is truly the case for McDonald’s, they may have passed their hey day.