Shake Shack, KFC, Others Tap Kiosks to Boost in-Restaurant Margins
As restaurants’ labor challenges continue, leading brands are leveraging kiosks to drive in-store sales without the cost of face-to-face service. Shake Shack, for one, announced Thursday (Aug. 4) that the company plans to have self-service kiosks in nearly all of its locations by the end of next year.
On a call with analysts discussing the company’s second-quarter fiscal year 2022 financial results, Chief Financial Officer Katherine Fogertey said kiosks yield higher checks and a higher attachment rate for special officers than traditional channels.
“We see guests responding quite positively to it,” Fogertey said. “It’s also one of our highest margin channels as well, and we see that we’re able to get some staffing efficiencies in our shacks where we have kiosks, so we’re very excited to … roll them out to essentially all of our shacks over the next 18 months.”
Similarly, major restaurant company Yum Brands told analysts on a call Wednesday (Aug. 3) discussing its second-quarter results that subsidiary KFC has been rolling out kiosk ordering internationally. CEO David Gibbs noted that implementing kiosks contributed to sales growth in the Latin America market, and CFO Chris Turner explained that doubling kiosk penetration in stores throughout Africa has helped the company “improve customer experience and drive greater insights into customer behavior.”
Additionally, quick-service restaurant (QSR) giants McDonald’s and Restaurant Brands International also mentioned on recent earnings calls how self-service kiosks are helping contribute to their overall digital performance.
Notably, despite major restaurant brands arguing for the benefits of self-service kiosks, across the industry, restaurants’ adoption of the technology is actually on the decline, according to data from the 2022 edition of the Restaurant Readiness Index, created in collaboration with Paytronix.
Read more: More Than Half of Restaurants Depend on Digital Sales, Despite Uptick in On-Premises Orders
The study, which drew from a survey of more than 500 managers of full-service restaurants (FSRs) and QSRs across the country, found that 18% of restaurants offered self-service kiosks inside the store as of April 2022, down significantly from 23% in September 2021. Similarly, only 9% offered drive-thru lanes with self-service kiosks in April, a share just over half of the 16% that did so back in September 2021.
On the consumers’ side, the majority of all off-premises customers believe self-service kiosks have a positive impact on their satisfaction, while only a small share of on-premises diners believe the same. Research from the May/June edition of PYMNTS’ Digital Divide study, “The Digital Divide: Technology, The Metaverse And The Future Of Dining Out,” also created in collaboration with Paytronix, reveals that 51% of grab-and-go customers feel positively about ordering via kiosk, far greater than the 20% share of dine-in customers that share this sentiment.
Related news: Restaurants Tinker With Tech Recipe to Balance Efficiency and Personal Service
Moreover, the study, which drew from an April survey of nearly 2,500 U.S. adults who regularly purchase food from restaurants, found that millennials tend to be the keenest on using these kiosks, closely followed by bridge millennials and Generation Z consumers. About half of all millennials feel positively about them, as do 45% of bridge millennials.
