As negotiations for next year's minimum wage reach their final stages, the restaurant industry is increasingly turning to automation to alleviate rising labor costs. The scope of automation is rapidly expanding beyond simple ordering kiosks and table ordering systems to include cooking robots and AI-based store management systems.
On July 7, the Minimum Wage Commission held its 12th plenary meeting at the Government Sejong Center to discuss next year's minimum wage, while the restaurant industry closely monitors the outcome. With rising raw material prices, high exchange rates, and declining sales due to consumer sluggishness, any increase in labor costs, which constitute a significant portion of fixed expenses, could lead to inevitable declines in profitability.
In response to these labor cost pressures, the industry is seeking solutions through the introduction of unmanned and automated facilities. Paris Baguette has launched a hybrid store model, the first of its kind in the bakery sector, featuring both staffed daytime and unmanned nighttime operations. After pilot operations began in October at two locations, the model has now expanded to 65 stores nationwide.
Starbucks Korea, which has emphasized face-to-face customer service, introduced kiosks in over 20 stores, including locations in Myeongdong and Gangnam, marking the first such implementation in the country. While this move was aimed at enhancing convenience for foreign tourists, it is also seen as a symbolic representation of the automation trend in the industry.
The recent trend in automation is evolving beyond simple ordering and payment processes to encompass entire kitchen operations. Kyochon Chicken has installed automatic dough-making equipment in some stores, while bhc operates an automated frying robot, 'TuiBot,' to enhance cooking efficiency and ensure consistent quality. Lotteria has also deployed robots in select company-owned stores to handle patty cooking and frying tasks, replacing repetitive manual labor.
AI-driven operational innovations are also gaining momentum. Mom's Touch is collaborating with AI service robot company XYZ to develop a 'fully unmanned robot store' that automates the entire process from ordering to cooking and menu delivery. Hanwha Galleria has introduced collaborative robots in the production line of its premium ice cream brand, Benson, allowing the factory to operate with 50-60% of the usual workforce.
Store automation is expected to accelerate in line with the trend of increasing minimum wages. A survey conducted by the Korea Federation of Small and Medium Businesses found that 77.6% of respondents from 994 small and medium enterprises reported that the current minimum wage level is burdensome for their operations. Furthermore, when asked about potential responses to an unmanageable increase in minimum wage, the most common answer was to reduce new hiring.
However, there are concerns that automation may not be a universal solution for all restaurants. The initial investment costs can be substantial, and many tasks related to kitchen and hygiene management are difficult to fully automate. Small business owners, in particular, may face significant financial burdens, suggesting that automation will primarily spread among large franchises for the time being.
Seoyong Gu, a professor of business administration at Sookmyung Women's University, stated, "While AI and automation can enhance competitiveness for large franchises with capital, they may create barriers to entry for small businesses and self-employed individuals lacking investment capacity. Ultimately, there is a high likelihood that a significant gap centered around AI will emerge in the restaurant industry."
* This article has been translated by AI.
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