First the US economy. Hey, it's doing great. All that talk about a recession -- yes, it's still there -- but we still need that first quarter of negative growth. Having another month to massage the data, the Obama administration was able to find a way to revise
the final 4Q15 GDP number to 1.4%:
The third and final estimate of
gross-domestic-product growth for the fourth quarter was 1.4%.
This was higher than the 1% annualized pace that was reported in the second estimate and that was expected by economists.
The report showed that consumer spending continued to propel the economy, while exports and local government spending fell.
Yes,
propel. Not exactly the word I would have used.
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The Restaurant Page
An interview with the CEO of Carl's Jr:
'We're not the brand for people who eat nuts and bark," CKE Restaurants CEO Andy Puzder,
tells me without apology. "Hell, I'll walk into one of our stores to
get a barbecue chicken sandwich and walk out with a Western bacon
cheeseburger. You smell them, and you just get hungry. We're the 'young,
hungry guy' brand."
Even those who have never frequented one of
Mr. Puzder's fast-food restaurants—known as Carl's Jr. west of the Rocky
Mountains, and as Hardee's in the Eastern U.S.—will be familiar with
his dude-centric brand. How could anyone forget their Super Bowl ads?
This year's featured 21-year-old Danish swimsuit model Nina Agdal fondling a fish sandwich on a beach in Maui. In last year's 1950s throwback ad, blonde bombshell Kate Upton
gorged on a Southwest jalapeno patty melt at a drive-in as she stripped
to the tune of "Some Like It Hot." For the record, Mr. Puzder says he
doesn't attend his company's ad shoots: "I have a very good marriage.
And I want to keep it preserved."
The demographic targeted by the
ads does not include the CKE chief executive. But as Mr. Puzder, a fit
and trim father of six, with six grandchildren and a seventh on the way,
tells me in a recent visit to the Journal's offices, "I'm 62. I want to be a young, hungry guy."
The
robust marketing has helped revive a company that a decade ago was
still suffering a $700 million debt hangover after purchasing Hardee's
in 1997. Since Mr. Puzder took charge in 2000, CKE has grown
consistently. Revenues have increased by 3.6% over the past year to
about $1.3 billion, and its international restaurant count has grown by
more than 15% annually over the past three years.
Mr. Puzder is quick to
point out that many of his competitors aren't doing as well and the
U.S. economy remains underpowered.
And it only gets better after that.
And if you want to know why restaurant automation is "on the menu,"
The Wall Street Journal has that covered also (actually, anyone who doesn't know
why restaurant automation is on the menu will be awarded an
honorary Geico Rock Award).
The story was written by none other than the CEO of CKE.
So why the increased use of technology? The major reason is consumer
preference. Research shows that many appreciate the speed, order
accuracy, and convenience of touch screens. This is particularly so
among millennials who already do so much on smartphones and tablets.
I’ve watched people—young and old—waiting in line to use the touch
screens while employees stand idle at the counter.
The other
reason is costs. While the technology is becoming much cheaper,
government mandates have been making labor much more expensive.
In
2015, 14 cities and states approved $15 minimum wages—double the
current federal minimum. Additionally, four states, 20 cities and one
county now have mandatory paid-sick-leave laws generally requiring a
paid week of time off each year per covered employee. And then there’s
the Affordable Care Act, which further raises employer costs.
Dramatic
increases in labor costs have a significant effect on the restaurant
industry, where profit margins are pennies on the dollar and labor makes
up about a third of total expenses. As a result, restaurants are
looking to reduce costs while maintaining service and food quality.
Highly
automated models have limited applicability for restaurants with more
complex menus. For example, at CKE Restaurants, the company I lead, our
Carl’s Jr. and Hardee’s employees make biscuits from scratch. They bread
chicken tenders by hand, prepare complex burger orders, hand-scoop the
ice cream for milkshakes, and the restaurants offer table service. None
of these tasks can be effectively automated, and we wouldn’t want them
to be.
I've always wondered by McDonald's has not gone to automatic ordering across the US. Yes, I know there are some McDonald's with automatic ordering -- or at least there were several years ago when I was still flying through various national airports -- but for the most part I have not seen them. I assume it's the upfront cost. And one wonders exactly how many employees an automatic system would actually replace. At McDonald's, I don't think very many, if any.
My hunch is that there are too many McDonald's customers who would be confused by the technology, mis-order at the kiosk, and then complain about their order when they went to pick it up.
The CKE/CEO says the main reason for automatic ordering is because customers like it:
The major reason is consumer
preference. Research shows that many appreciate the speed, order
accuracy, and convenience of touch screens. This is particularly so
among millennials who already do so much on smartphones and tablets.
I’ve watched people—young and old—waiting in line to use the touch
screens while employees stand idle at the counter.
Two comments:
- speed of service is generally not an issue at McDonald's; automatic ordering won't help, in general, to speed up service at McDonald's
- McDonald's is not exactly a mecca for millennials
If a 90-second wait for your McDonald's meal is too long, you live in a very different world than I live in.
For those who can't get enough of my posts on Carl's Jr -- all three of you -- here are links to past posts:
- Carl's Jr won't expand in California due to ObamaCare, June 15, 2013
- Carl's Jr sees a train wreck coming, getting out of the way, June 15, 2013
- Fast food restaurant expansion ain't happening with minimum wage increases, May 30, 2014
- Why businesses are ditching California, heading for Texas, July 2, 2014
- Carl's Jr commercial on Texas television, September 13, 2014
- Carl's Jr leaves California; heads to Tennessee, March 12, 2016
I'm heading out; it's almost noon. The nearest Carl's Jr is almost 20 miles away, so I will bike to Whataburger down the street.
