Years ago, the technology of choice in your local diner was a mini jukebox on the table. Today, it’s a touch screen so you can place your order directly to the kitchen from your table.
That’s what Ron Shaich, founder and CEO of Panera Bread envisions for his 1,946 bakery-cafes in 46 states. Although Shaich is excited about his forward thinking digital plan, his 80,000 associates who he admitted in a recent commencement address “depend on us for steady employment” are less sanguine about the prospect.
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Shaich told investors during an analysts’ call this last Wednesday, "Labor is going to go down, and as digital utilization goes up — like the sun comes up in the morning — it is going to continue to go up…. As it happens, it's going to benefit larger organizations like Panera, who already have the technology in place."
Sounds like comments from a hard-boiled business guy, not someone who’s considered a humanitarian running a socially responsible company with a market cap of $4.72 billion.
Last year, speaking at Clark University’s commencement, his alma mater, Shaich admitted he wanted to change the world. And he has taken action against poverty and hunger by starting “Pay-What-You Can” cafes in a number of neighborhoods. He also dropped many artificial ingredients from his suppliers, including preservatives, and meat from animals raised with antibiotics.
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But business is still Shaich’s first priority, even though he claims lowering labor costs is simply a side benefit of the technology. "We did our digital capabilities to give a better guest experience. It was never about labor," he said.
Panera’s labor costs rose $20 million in Q3—from $170 million to $190 million.