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News Every Day |

Fast-food chains like Burger King, Shake Shack, and KFC are doubling down on digital order kiosks — but watch out, you'll probably end up spending more

Illustration of a dollar sign hovering over a kiosk.
Kiosks are becoming ubiquitous at fast-food locations across the US.
  • Fast-food giants are rapidly deploying more order kiosks in the US.
  • They save on labor costs, are more accurate, and push customers to spend more.
  • Kiosks are "a win on every single front," RBI executive chairman Patrick Doyle said.

Major US fast-food chains plan to aggressively add more digital order kiosks to their restaurants – and bring in bigger checks in the process.

Burger King is eyeing a huge kiosk expansion in the US after a pilot with "tremendous results," Josh Kobza, CEO of parent company Restaurant Brands International, told investors in November. The burger giant already has kiosks at more than half of its non-US restaurants and plans to keep deploying them under plans to convert the business to "100% digital," he said.

Shake Shack said in February that it had rolled out kiosks to "nearly all" of its almost 300 US company-operated restaurants and saw kiosk sales in the fourth quarter double year-over-year. They make up "well over" half of its in-restaurant orders at these locations, CFO Katie Fogertey told investors in November.

Yum! Brands, which owns Taco Bell, KFC, Pizza Hut, and the Habitat Burger Grill, is focusing on kiosks, too.

Customers can order at kiosks at all of Taco Bell's US restaurants. KFC had kiosks in about 500 US restaurants at the end of 2023, "a huge step up from nearly zero only two quarters before," Yum! CFO Chris Turner told investors in February. KFC plans to have them in the "vast majority" of its non-China restaurants by the end of 2026, Turner said in November.

Kiosks are lucrative for restaurants

Kiosks reduce labor, meaning restaurants can either hire fewer staff or deploy them to other areas of the business, like in the kitchen or on the drive-thru.

As wages go up in the industry, "there's more impetus on restaurants to look for labor productivity savings," Sharon Zackfia, an analyst at William Blair, told Business Insider. With kiosks, "you are basically able to arbitrage the labor into more value-added activities," she said.

They're Shake Shack's "most profitable channel," Fogertey told investors last August. As well as labor savings, kiosk orders "tend to skew to dine-in" and thus use less packaging than other digital orders, she said.

Kiosks also increase order accuracy and enable restaurants to easily adjust menu items – and their prices. And when the kiosks aren't in use, restaurants can use them to promote deals.

Wendy's order kiosk
When Wendy's kiosks aren't in use, it uses them to promote deals.

Diners are more likely to splash out

Customers ordering at kiosks tend to spend more money.

Shake Shack CEO Randy Garutti told investors in February that people who ordered at kiosks rather than at cashiers spent on average nearly 10% more.

Kiosks can push customers to add drinks or sides, switch to larger portions, or add costly customizations. Fogerty noted that Shake Shack had introduced new technology to "drive increased attach rates and customization."

Wendy's order kiosk
An order kiosk at a Wendy's restaurant in London. It suggested adding bacon and avocado to a burger.

Andy Barish, an analyst at Jefferies, told BI that kiosks would "100% of the time try to upsell you to a larger item or ask you if you want to add on french fries or chips and guacamole," whereas cashiers at a busy fast-food restaurant may not "because there's a bunch of people trying to get through the line as quickly as possible."

And when diners order at kiosks, they feel less rushed, meaning they "browse the menu and customize more," Sharon Zackfia said.

Kiosks can also promote items based on the time of day, season, and weather, like iced drinks on hot days.

And some kiosks allow customers to scan their loyalty apps to collect points from their orders, which in turn means the kiosks can display personalized recommendations based on data they pull through from customers' loyalty apps.

Taco Bell Newcastle kiosk order
Taco Bell's kiosks in the UK let you collect loyalty-app points.

Customers are 'more accepting' – and the pandemic may have helped

Some restaurants were slow to start introducing kiosks. "I think a lot of the industry operators for a while struggled with the idea of having to spend money on kiosks when effectively many consumers are walking around with a computer in their pocket to be able to order from," Jon Tower, an analyst at Citi, told BI, referring to restaurant loyalty apps on customers' phones.

Though kiosks are common at fast-food restaurants overseas, they took much longer to be deployed in the US.

When Burger King started rolling out kiosks in the US a few years ago, "there wasn't so much consumer uptake," Kobza said in November. "That condition has really changed … Consumers are more accepting of it in the US than they were a few years back."

The pandemic means that customers are "much more at ease with digital ordering," Zackfia said. "We have a preponderance now of millennials and Gen Z that have grown up with digital ordering. So translating that to a kiosk is pretty easy." Some older customers may need a bit of "handholding" at first, though, Barish noted.

Patrick Doyle, executive chairman of RBI, which owns Burger King, Popeyes, Tim Hortons, and Firehouse Subs, told investors in November that kiosks were "a win on every single front."

"My point of view is we need to get this business to 100% digital," Kobza said. In the US, digital orders currently make up just 15% of Burger King's sales. "We should have all of the order-taking done through digital ordering channels over time … that's sort of our North Star of where we want to go with the business."

Would you rather order at a kiosk or with a cashier? Email this reporter at gdean@insider.com.

Read the original article on Business Insider
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