Eatsa Closing in Berkeley, NYC, D.C. a Setback for Pizza Hut, McDonald’s Restaurant Automation Plans

Eatsa Closing
iStock.com/zoom-zoom

Major restaurant chains like Pizza Hut, Inc. and McDonald’s Corporation (NYSE:MCD) planning to automate their services have been served a major blow this week as news of Eatsa closing most of its locations makes headlines. Automated restaurant chain Eatsa is closing all but two of its locations after just two years in business.

All of the Eatsa restaurants closing are located in prime dining hubs in Berkeley, NYC, and D.C. It seems like humans are not fully ready yet to get their food prepared by invisible hands or served by robots.

Automated Restaurant Eatsa Closing at 5 Locations

Fully-automated restaurant Eatsa is closing five of its locations. One location is closing in Berkeley with an additional two restaurants closing in New York City and two restaurants closing in Washington D.C. The company management feels that Eatsa expanded its retail footprint “too quickly.”

At Eatsa, customers order food online through their smart devices or at the restaurant’s digital self-serve kiosks. The food is prepared behind the walls by unseen cooks, but mostly by machines. It finally arrives to the customers in a robotic cubicle. Overall; customers get their food ordered and served without any human interaction.

Advertisement

In a blog post, Eatsa’s management explained that the quick expansion into the four regions did not allow the management enough time to “test and iterate our food product — something that is critical in any restaurant business.”

Reading between the lines, that appears to mean that the restaurant had troubles selling, not only because of its robotic service model, but also because of its mediocre menu. After all, how many quinoa salad bowls can you sell to the locals each day, every day? Even the most loyal fans must seek change every once in a while.

Eatsa’s menu options are limited, consisting of healthy, nutritional foods—mostly salads, rice, and quinoa bowls. The lack of originality and diversity in the menu may have partly been the reason behind Eatsa’s underwhelming sales.

However, the more stark reason to cause its downfall remains its fully-automated business model. The idea of machines taking, filling, and serving food orders is still a very futuristic idea that the average American is not ready to fully adopt—yet.

So, for now, it may work in and around the tech powerhouse of San Francisco’s Silicon Valley, where residents mostly work with robots and so are accustomed to them, but outside, it may take some time. This is why Eatsa will continue to operate two of its locations in San Francisco—its hometown—while closing all other locations.

Eatsa Closing Bad News for Big Restaurants Like Pizza Hut & McDonald’s Planning to Automate?

Eatsa’s blog post also mentions that the automated restaurant will now be partnering with other restaurants to bring its automated technology to the mass market. However, other major restaurants looking to automate their services are now posed with a hard question of whether an automated restaurant model can actually work on a mass scale.

Restaurant automation is not a new idea. America’s biggest restaurant chains, like McDonald’s and Yum! Brands, Inc. (NYSE:YUM)—owner of Pizza Hut, Taco Bell, and KFC—are already betting on robots to take over the restaurant industry.

Automation—in the form of self-serve kiosks and self-checkout terminals—has already arrived at these big restaurants. McDonald’s has, in fact, pioneered digital kiosk ordering and checkout service at 2,500 of its restaurants, replacing the jobs of thousands of cashiers.

Some restaurants are taking it a step ahead by replacing humans with robots flipping burgers, and waiting and serving customers. In fact, the CEO of Yum! Brands Greg Creed foresees robots and automation replacing most restaurant jobs by mid-2020s. And why not? Restaurants have a great incentive to replace technology with humans. They save millions on employee salaries and benefits.

However, an automated restaurant closing its locations should serve these restaurants with a reality check. The big restaurant chains looking to automate their services are posed with the critical challenge of making customer experience seamless and easily adaptable for economies of scale to work.

However, until average Americans become accustomed to the idea of interacting with lifeless machines on day-to-day basis, full automation in restaurants may take years to work out on a mass scale.

 

Sources

Big changes at eatsa,” Eatsa Blog, October 23, 2017.

McDonald’s hits all-time high as Wall Street cheers replacement of cashiers with kiosks,” CNBC, June 20, 2017.

In a decade, many fast-food restaurants will be automated, says Yum Brands CEO,” CNBC, March 28, 2017.

Advertisement

Advertisement