Dive Brief:
- McDonald’s is expanding its tests of Archy, its smart ordering system, across additional drive-thrus in the U.S. and Australia, CEO Chris Kempczinski said during a Wednesday earnings call.
- The company expects Archy to be deployed across most of its U.S. restaurants by the end of next year, with further pilots planned internationally throughout 2027.
- Archy, which includes drive-thru voice ordering technology, will allow McDonald’s employees to focus on customers and food quality, Kempczinski said.
Dive Insight:
Archy is part of McDonald’s ArchIQ AI platform, which the chain announced in September under the Next initiative and includes automated inventory tracking and connected equipment The Next plan also calls for restaurant remodels, menu innovation and refreshed marketing strategies.
“This is Next in action, strengthening how we operate today while building the growth platforms and capabilities that will position McDonald’s to lead for the long term,” Kempczinski said. “We’ll continue to regularly update you on our progress and associated results behind key elements of Next throughout 2027.”
Archy can take orders in both English and Spanish, and has accuracy above 90%, executives said during the chain’s September investor day. Customer satisfaction was high during early tests. The tech is expected to free up at least 50 labor hours weekly.
Technology is part of McDonald’s plans to improve restaurant margins by 250 basis points, and saving labor hours could help advance that goal.
However, franchisees expressed skepticism, according to an October report from Peter Saleh, U.S. Bancorp | BTIG managing director and restaurants and food distributors analyst. McDonald’s operators said little has been shared about specific productivity improvements and this target “seems highly theoretical,” Saleh wrote.
“Franchisees are most excited about the inventory management tools, a smaller portion of the 250 bps target, but one that many agree has the opportunity to save manager labor hours, reduce food waste, and enable lower inventory levels,” Saleh wrote. “Some skepticism was voiced on these efforts not being entirely new, as well as the cost of these systems (technology fees, RFID tags, etc.) and the need for a more accurate accounting that reflects both, netting to a smaller margin benefit.”
Franchisees appear to have a “reluctant acceptance” of the technology.
“While Archy appears to be making progress on accuracy in tests and franchisees are eager for the labor savings (indeed it’s needed to justify the investment…), some questioned if the consumer actually wants this technology, and if voice AI is inconsistent with the renewed focus on service and hospitality,” Saleh wrote.
