MCD: A Robot Waiting to Happen?
Board: Macro Economics
I bought MCD today after eating a very rare breakfast in one of their stores. I've been meaning to do it for a while, like years now. They satisfy my #1 requirement of paying a dividend higher than 10 year treasuries (actually, higher than 30 year at 3%), and I don't see people getting thinner or healthier except at the margin.
But the thing that made me pull the trigger today was the realization that the whole business could be automated.
I've been eating the same Sausage McMuffin with Egg since I was 7 years old. The patty hasn't changed, the muffin hasn't changed, the recipe hasn't changed. In fact, that's one of the reasons people turn to the golden arches in the first place: It's comforting, consistent, nostalgic food for a very large number of people. In fact, I'd guess that the #1 variation in my McMuffins over the years has been due to human error.
The basic layout of the store hasn't changed either. Ordering station, kitchen, with a hot rack in between to pass the food between. Fries station on the side, ice cream station opposite side.
The whole place is a robot waiting to happen. I can imagine in 10 years walking into a McDonald's with 2 people on staff to maintain the burger stations and replace food inputs as they run low. For a company that employs 1.7 million people worldwide, the impact on margins will be impossible to ignore. I'd be shocked if they're not working on it right now.
This is just a hunch, but I saw it today. So I bought some stock.