McDonalds’ AI Failure
Two years ago, McDonald’s implemented AI menus that would have an automated ordering system at drive-thrus. Restaurant Business Online reported that the restaurant is ending its partnership with IBM and removing the system from all restaurants using this technology. Artificial intelligence has become a mainstay in today’s culture and has been integrated into many different aspects of our lives.
While McDonald’s pauses its experiment with AI menus, many other fast food restaurants have been experimenting with dynamic pricing on virtual menus. This means your meal may cost more during busy times like lunch and dinner, but during slow times, your meals will decrease in price. Wendy’s made the rounds in the media back in February for introducing a plan that would work similarly to dynamic pricing, only to release a statement saying that this “was misconstrued” and that they will not be introducing surge pricing. McDonald’s and Wendy’s are two restaurants that have been fighting the poor PR image when it comes to their price increases over the last few years, but both seem to be holding steady to price increases.
Consumer Spending Slows
The United States Census Bureau released a report on U.S. consumer spending for retail and food services. The month of May showed an increase of 0.1% in retail spending, which indicates consumers’ willingness to reduce their spending during times of inflation. With recent reports of slower inflation for the month, these numbers are interesting, if not confusing. We know that interest rates were net zero last month, but overall the rates were influenced by lower gas prices. Yet consumers are still cautious about their spending overall and are not willing to act as if the economy is operating in full stride. We will need to see a few months of data before we can declare the economy back at full strength, or still stuck in stagnation.
The Market Stays Strong
The market continues to be strong, even with ambiguous at best news regularly coming from U.S. agencies. The S&P 500 is currently trading around $5,490, after opening the week at $5,431, while the DJI is trading around $38,780 after opening Monday at $38,565. For those wondering about the unstable, yet massively popular GME, after opening the week at $28.56, it is currently trading around $25.20. Traders and brokers seem to be bullish on the future of many of our major companies and the future of the U.S. and other international markets as prices continue to increase.
Why It Matters – We Patiently Wait
Many are patiently waiting for the slowdown of inflation and hope to stop seeing stories about McDonald’s and Wendy’s and their price increases. The job market has been flat for the past several years, but were told the market looks great for those seeking employment. Consumers need to operate at their personal comfort level when it comes to the market and avoid high-risk investments in an uncertain economy. For more information on how to take a strong approach to the market, check out our financial glossary on all things stocks and markets here.
