Uncertain ROI Holds Industry Back
As AI and automation become crucial in the quick-service restaurant (QSR) sector, operators grapple with balancing the promise of improved efficiency against unclear returns on investment.
In the UK, Josef Chen, CEO of the robotics and AI firm KAIKAKU, has observed an industry push towards automation spurred by anticipated increases in labor costs under the new government. However, there has been limited innovative exploration of AI and automation among QSR brands in the UK.
Josef points to the lack of clear ROIs as a significant barrier. “Few automation and AI solutions have shown measurable returns, with many retrofitting attempts, like Karakuri’s partnership with Nando’s pre-bankruptcy in 2023, failing to deliver,” he explained. He emphasized that a comprehensive, vertically integrated approach is essential rather than repurposing existing human-centric processes.
Anson Chuang, founder of Mountview Consulting, echoed these sentiments, noting that while management holds high expectations for AI, groundbreaking innovations have not materialized despite supplier efforts. "In the UK, it’s challenging to persuade chains to experiment. With tight margins, tech providers often receive limited budgets," he said.
Currently, only larger chains are actively pursuing innovations in AI and automation. Maria Vanifatova, CEO of Meaningful Vision, indicated that these chains are more likely to test technologies in the US before introducing them to the UK. "The UK serves as a testing ground for many US brands, and while local AI development is growing, some ideas are already being utilized to analyze customer feedback and create marketing messages via ChatGPT-type solutions," she stated.
Jimmy Tjhie, founder of the Yari Club, sees AI and automation as vital for elevating operational standards and coping with challenges stemming from new immigration policies affecting skilled labor. He noted, "The rising expectations of customers necessitate swift innovation, and AI helps businesses adapt and remain efficient in a changing market." His restaurant uses a robotic yakitori machine, aiming for fast turnover that rivals fast-food establishments.
Experimental Phase
Overall, AI and automation technologies remain largely experimental. In the US, McDonald’s paused its AI voice drive-thru trials, while Taco Bell expanded its voice AI technology across many locations.
Vanifatova cited the clear incentive for companies to invest heavily in such technologies: successful implementation could lead to reduced staffing needs and cost savings. As advancements continue, AI may enhance customer interactions in drive-thrus and via phone with human-like accuracy.
Weighing Costs
Tjhie is convinced that investments in robotics and technology are valuable, primarily for minimizing recruitment and training complexities. However, he cautioned that while the financial costs may align with other investments in the food and beverage sector, there are significant indirect costs, including research and development and strategic planning.
For Chuang, larger chains poised to invest in these technologies will reap significant benefits. He identified two main areas wherein AI can excel: enhancing operational efficiency through better forecasting and order management, and augmenting sales via improved customer insights.
To assess intangible ROIs, Tjhie advises evaluating how new technologies establish the business in the market and contribute to customer retention. Chen highlighted numerous promising applications for AI and automation, such as Computer Vision for quality control and allergen management, alongside systems to monitor in-store wait times and conversion rates.
