Why Jack in the Box, not Wendy’s, is the burger company that should be copying

The third quarter results from Jack in the Box showed an average menu price increase of 2.4 percent, a slight increase from last quarter’s 2.3 percent. The company said it’s benefiting from a more focused menu: The new Menu of the Future even puts fewer fast-food items on the menu, with items such as a platform of high-protein options (including a selection of appetizers and salad bars) mostly ditched.

As the chain continues to tweak its offering, the company found something that works: a new pickle popsicle. The pop rocks soda pulled in $1.4 million in revenue, a significant rise from a year earlier. The brand’s focus on variety doesn’t hurt sales, either — the company’s most popular burger, the “Raise a Salute” burger, saw its sales rise by 2.7 percent.

The key for the company is in continued innovation. Jack in the Box is known as the pioneer in extreme fast-food offerings, such as the location that served milkshakes made from combusted vending machine mixers. It is an innovation factor that allows the brand to continue its relationships with millennials — one of Jack in the Box’s core customers — while offering something new to keep them coming back.

Wendy’s appears to be heading in a different direction — a path that, in fact, Jack in the Box is following. In March, Wendy’s announced it would test the concept of “ghost kitchens,” allowing staff to make hamburgers and other items on the menu without ever touching hamburger meat. By automating the process — so employees can focus on other areas of the business — the company hopes to increase profit.

“This process gives us the opportunity to reimagine the restaurant system to create the most relevant format for our restaurants going forward,” said Brandi L. Wong, Wendy’s Chief Executive Officer, in a statement. “We can minimize labor costs, reduce distraction and increase the level of labor efficiencies and experience consistency across stores.”

Wendy’s sounds like a beacon to copy — essentially, making the hamburger industry less labor intensive and more price-conscious. But the test will not replace the support and help employees have to work through production. Wendy’s will simply reduce the number of centers of production, and an employee to work that part of the process can now find themselves getting a more rewarding and ambitious job.

Though Wendy’s still hasn’t mentioned a price-point for the ghost kitchens, experts say it doesn’t have to be much different than the one it’s hoping to do away with, since McDonald’s raised its minimum wage. At $15, the cost of the new robots would likely be less than a dollar.

“Ghost kitchens essentially replace all the labor involved with preparing a hamburger to make it done before employees touch it,” said Andrew Thomas, a Duke culinary school professor. But don’t expect the fast-food industry to fight back — most major chains are already using robotic technology. McDonald’s and Arby’s have already announced plans to introduce toasters that automatically pick up food orders, with Burger King committing to adding more of them. “It doesn’t mean that the wage keeps going up,” said Rodney Kim, McDonald’s Sr. Director of Global Engineering. “It means that the percent of labor that is discretionary is changing.”

This story, in part, is from our sister site, The EconoMonitor.


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