PANERA CEO: Robots will replace our labor 'like the sun comes up in the morning'

robot toyWikimedia Commons

From "Terminator" to "The Matrix," the idea of a robot revolution has established a place in the cultural lexicon for decades.

According to Ron Shaich, Founder and CEO of Panera Bread, there is a tech revolution coming, and it's going to be bad news for many workers.

"Labor is going to go down," said Shaich in a quarterly earnings call Wednesday. "And as digital utilization goes up - like the sun comes up in the morning - it is going to continue to go up. Digital utilization. You are seeing it happen in Panera today."

"As it happens, it's going to benefit larger organizations like Panera, who already have the technology in place."

Shaich's company, Panera Bread, is in the middle of the rollout for Panera 2.0, which includes installing touchscreen ordering stations for customers at tables and the to-go line.

While the impetus for the change was not explicitly due to rising labor costs, Shaich recognizes it is a side benefit.

"[Labor costs were] also one of the reasons - when we think about 2.0 - we think about digital utilization," said Shaich according to a transcript of the call. "We did our digital capabilities to give a better guest experience. It was never about labor."

According to Panera's earnings release, costs associated for labor accounted for just over $190 million in the third quarter, or 32.6% of store-related expenses. This is up from just over $170 million, 0r 31.2% of expenses, in the third quarter of 2014.

ron shaich panera ceoPanera Bread Founder and CEO Ron ShaichStephen Lovekin/Getty Images

The way Shaich sees it, labor is a commodity. And as commodity prices increase, businesses have to look to alternatives.

"All of us in the industry essentially view this as inflationary, just like if there was a broad based increase in any commodity. And labor is a commodity in that sense. It's going to affect all of us, and we are all going to have to take price. That's the reality of it, and I think it's going to affect us all," he said.

Panera's story isn't unique, companies such as McDonalds and the Cheesecake Factory have previously raised wages and spoke about this sort of pressure. Macro level data such as the time it takes to fill a job and job openings also point to rising wage pressure.

Nor is the company's response unique. The aforementioned McDonalds has installed similar ordering stations in some of its restaurants and even Best Buy has begun to install robot helpers to make shopping quicker.

In fact, some economists predict that half of all human jobs will be done by robots in the next 10 years.

So according to Shaich, the tech revolution is coming, at the very least to restaurant workers.

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