McDonald’s has agreed with technology company IBM to sell its McD Tech Labs for an undisclosed amount.
The McD Tech Labs develop employee and customer-facing technologies. In 2019, McDonald’s acquired the tech company Apprente, which later became McD Tech Labs. This acquisition allowed McDonald’s to test automated ordering technology (AOT).
This summer, between June and September, the fast-food chain began using artificial intelligence (AI) software to take orders from customers at ten of its outlets in Chicago, US. The software was found to be 85 per cent accurate, according to CEO Chris Kempczinski.
Implementing this technology at its 14,000 restaurants across the US is expected to take roughly two years. While AOT can boost speed and accuracy, the challenge of including several languages and the McDonald’s menus from 40,000 locations across the world ‘is beyond the scale of our core competencies’, said Kempczinski on an earnings call.
IBM’s expertise in developing customer care solutions powered by AI and natural language processing is expected to advance the AOT technology by integrating additional languages, dialects and menu variations. The advanced AOT will help the fast-food chain take orders in more languages and dialects.
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IBM expects this acquisition to complement the current work of developing and delivering AI-driven customer care solutions through IBM Watson. Completion of the deal is subject to regulatory approvals as well as other customary closing conditions. It is expected to close by December.
Upon completing the transaction, McDonald’s McD Tech Labs team will become a part of the IBM Cloud and Cognitive Software division. Meanwhile, McDonald’s has announced its Q3 results, ending 30 September.
Its global comparable sales grew by 12.7 per cent in Q3 2021, as against the same period a year ago. The US similar sales grew by 9.6 per cent, while international operated markets increased by 13.9 per cent. The consolidated revenues rose 14 per cent to $6.20 billion, and systemwide sales also increased 16 per cent to $29.94 billion.
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Consolidated operating income surged 18 per cent to $2.98 billion and included $106 million of strategic gains associated with the divestment of McDonald’s Japan stock. Diluted earnings per share for the quarter jumped 24 per cent to $2.76. In a separate development, US-based coffee chain Starbucks has announced investments in wages and benefits.
Starting from late January 2022, employees holding two or more years of service could receive a raise of up to 5 per cent, while those with five or more years would receive up to a 10 per cent increase in their wages.
The coffee chain expects average pay for all US hourly employees to rise to nearly $17 an hour, up from $14 an hour, by next summer.
The hourly barista rates would range from $15 to $23 based on the market and tenure of the employee.
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