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Letter to McDonalds Regarding Touch Screens

Thursday, July 7, 2011

July 5, 2011

McDonald's Restaurants of Canada Limited

McDonald's Place

Toronto, ON M3C 3L4

Dear Sir/Madam:


Dear Sir/Madam:

As president of the Alliance for Equality of Blind Canadians (AEBC), a national organization of rights holders who are blind, deaf-blind and partially sighted, I am writing to you regarding an article entitled, "McDonald's Replaces Cashiers with Touch-Screens" (reproduced below) which greatly concerns us and our independence to order food at McDonalds.

The issue of touch screens is becoming an issue of increasing concern to members of our community, as so many of them are not usable independently by blind, deaf-blind and partially sighted individuals.

We would like to know if McDonalds has plans to introduce touch screens into its Canadian operations and, if so, will these touch screens be usable independently by blind patrons, i.e. will they provide speech output.

Accessibility is mandated by both the Ontario Human Rights Commission and the Accessibility for Ontarians with Disabilities Act.

We look forward to hearing back from you in the near future.


Donna Jodhan



McDonald's Replaces Cashiers with Touch-Screens

European restaurants test self-checkout model

By Cynthia Wilson

Investor Place May 16, 2011

McDonald's (NYSE: MCD) is trying to make fast food even faster. The Financial Times reports that the worlds' largest fast food chain plans to replace many of the cashiers at its 7,000 European restaurants with touch screen terminals that allow customers to order and pay electronically. The move at McDonald's is similar to what many consumers experience in supermarkets, retailers and gasoline stations that have opted for self-checkout to save on labor costs. McDonald's says the move is about making its restaurants there more convenient and efficient - it's also clearly about keeping down costs. If the move proves successful, you can bet competitors like Wendy's/Arby's (NYSE:WEN) and Yum! Brands (NYSE:YUM) restaurants KFC and Taco Bell will be taking notice.

The decision is being driven by margin concerns. McDonald's is still growing sales, reporting a 5.7% increase in FY1Q11 in Europe (where the cashier-free order system is being tested) compared to the year ago period. But margins are being eaten up by higher commodity costs - beef and dairy in particular.

Also, consumers everywhere are struggling to pay bills under the weight of rising gasoline and food prices and a Big Mac or McCafe coffee is quickly becoming an expense many cannot afford as often as they may once have. That may be even more the case now that McDonald's has said it will raise menu prices to cover rising food costs. Eliminating cashiers may help McDonald's stabilize menu prices, or even cut some to help lure customers to its restaurants. It's not like most of McDonalds' customers don't know what they want when they come in to order.

By adopting a swipe and go payment system, McDonalds also can gather more information about its customers, such as their ordering habits and what menu items sell best to a particular demographic. However, some customers may not like it or not have credit or debit cards. Likewise, some may sympathize with the cashiers who lose their jobs. Many customers at stores from grocer Safeway (NYSE:SWY) to big box giant Wal-Mart (NYSE: WMT) have gotten used to checking themselves out - and considering the relatively small menu at McDonald's compared to the produce section at a supermarket, they may not find the self-check-out kiosks hard to use at all.

But while the ordering experience may not change, the labor market could feel an impact. During the Great Recession many consumers had to turn to McDonalds - one of the few employers still hiring - for employment. McDonald's itself recently held a "national hiring day" to fill 50,000 jobs company-wide. There may be some risk in rolling out a cashier-free system after touting the restaurant's footprint as an employer. What's more, if there are not enough accessible employees around to complain about when folks use the self-checkout for the first time, that could really give customers the impression McDonald's is just looking to cut corners to squeeze out a few more euros.

McDonalds didn't mention any immediate plans to make touch screen ordering and payment more widespread in the United States. But if it's successful in Europe, it won't be long before the U.S. consumers find themselves reading or talking to a screen.

As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.



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