Tech Check is a regular column on restaurant technology by Senior Editor Joe Guszkowski. It's also a newsletter.
A restaurant report out this week from Square contains an astonishing number.
The tech supplier’s survey of 2,000 operators from across the country revealed that virtually every last one of them—98%—believe that artificial intelligence is the answer to at least some of their labor woes.
These days, it’s hard to get 98% of people to agree that the sky is blue, let alone put their faith in something as novel as AI. And yet restaurants have fallen head over heels for the technology that promises to automate tasks typically done by humans.
Operators told Square they thought AI could be most useful in the areas of food prep and delivery management (42%), voice ordering (41%), inventory management (39%) and food prep by robots (38%). And more than half said they plan to increase their investment in automation this year—up from 38% in last year’s report.
The survey doesn’t seem to be an anomaly, either. Another report this week, from POS provider TouchBistro, found that 9 out of 10 full-service operators are already using AI in their restaurants, particularly digital assistants like Alexa (35%) and chatbots like ChatGPT (34%).
It’s easy to understand why restaurants are so taken with AI. They’re desperate for ways to operate more efficiently in the face of higher costs for food and labor. About a year ago, AI emerged as a potential knight in shining armor, one that could do everything from mix salads to write ad copy.
Yum Brands, the owner of Taco Bell, Pizza Hut and KFC, has been open about plans to use AI in a variety of areas, including taking orders, managing inventory and even counting pepperoni on a pizza. “I do think AI is going to change how we run our business,” CEO David Gibbs said during the Bernstein Strategic Decisions Conference in June, according to a transcript from AlphaSense.
But let’s not start ringing the wedding bells just yet. For all of restaurants’ apparent enthusiasm, their relationship with AI is still in the early stages: bursting with potential but short on actual results.
For instance, we have heard an awful lot about AI voicebots taking drive-thru orders and answering phone calls, but the impacts so far appear to be marginal at best. At Checkers, which is using AI in the drive-thru at about 350 restaurants, the bots have sped up service by about 7% and have saved four hours of labor per day—just enough to cover the cost of the technology itself—CIO Minh Le told me this summer.
(Checkers, by the way, is not exactly thriving. The company in June handed the reins to its lenders in order to restructure its debt and avoid a bankruptcy filing.)
Other chains, like McDonald’s, Wendy’s and White Castle, have been rolling out drive-thru AI much more slowly, suggesting that kinks remain. There are questions about the bots’ accuracy and whether consumers will accept the new way of ordering.
Restaurants’ infatuation with artificial intelligence is also at odds with research that suggests it will play a bigger role in other industries. A study published this week by the Society of Human Resource Management and The Burning Glass Institute found that generative AI like ChatGPT will mainly impact white-collar workers like financial analysts and software developers rather than rank-and-file restaurant employees.
Hiring site ZipRecruiter has indeed seen a lot of hiring around AI in the financial services sector, but not so much in hospitality, the company’s Chief Economist Julie Pollack told my colleague Peter Romeo recently. What she has noticed, though, is a lot of “experimental hiring,” where companies hire a small team “to see what the implications of AI could be.”
I suspect that most restaurants are in that experimental camp, even if they are outwardly excited about the possibilities of AI. And I think that’s the right place to be. Moving too fast has doomed many a budding romance, and until we know more about what AI can really do, it’s probably wise to take things slow.