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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the Radio plus Mobile Act and on your radio.

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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters

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Speaker 1: on Catherine Coldery of Bloomberg. Taking Stock is brought to

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Speaker 1: dot net which the markets every fifteen minutes throughout the

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Speaker 1: trading day. Let's go over to the First Word Breaking

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Speaker 1: news desk for today's afternoon call with Bill Maloney. Bill,

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Speaker 1: Good afternoon, Katherine. Stocks are under pressure today and reports

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Speaker 1: of a growing consensus within the e c B to taper.

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Speaker 1: QUEI dall is currently down a hundred and twenty one point,

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Speaker 1: says to be drop fifteen and a ZAC falls three.

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Speaker 1: Small cap six hundreds down five points, and the U

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Speaker 1: S Tenniel jumps to one point six eight percent. Ten

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Speaker 1: out of eleven s V sectors are lower, led by

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Speaker 1: losses in real estate, utilities and telecom. Um only financials

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Speaker 1: gained down. Transports fall thirty five, utility six sixteen, Nazerbotech

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Speaker 1: slump twenty and the VIX is higher by six percent.

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Speaker 1: Leaders to the downside of the down included three M,

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Speaker 1: Verizon and Chevron, while JP Morgan, Goldman, Sachs and Apple

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Speaker 1: led Salesforce jumped as much as three and a a half

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Speaker 1: percentage to day after the CFO said the company will

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Speaker 1: be a ten billion dollar company next year in revenue,

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Speaker 1: while Newmont Mining fell ten percent amid three percentic lines

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Speaker 1: in gold Life from the first breaking news DESKMBO Maloney, Katherine,

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Speaker 1: thank you villan to hear breaking news over your Bloomberg

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Speaker 1: type s q U A K on your terminal West

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Speaker 1: Texas Center. The ac crude oils down twenty five cents

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Speaker 1: a barrel, half a percent to forty eight fifty six.

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Speaker 1: It's about gold down forty one dollars and ounce. That's

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Speaker 1: the loss of three percent, trading at twelve seventy one

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Speaker 1: sixty ten year Treasury down seventeen thirty seconds, yield at

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Speaker 1: one point sixty eight twenty nine. And that's a Bloomberg

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Speaker 1: business flash. You're listening to Taking Stock with Kathleen Hayes

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Speaker 1: and Pim Fox on Bloomberg Radio. The restaurant industry and

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Speaker 1: federal government regulations. What are the connections. Well, here to

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Speaker 1: tell us all about it is someone who's an expert.

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Speaker 1: We have Mike Halin. He is our a senior restaurant

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Speaker 1: analyst for Bloomberg Intelligence, providing real time unique research in

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Speaker 1: a variety of industries as well as the marketed government

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Speaker 1: factors that affect business operations are terminal. Customers can access

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Speaker 1: this function at B I go all right, b I go,

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Speaker 1: Mike Halen, go for it. The restaurant industry and federal regulations.

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Speaker 1: I know a lot of restaurant owners. They have not

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Speaker 1: been happy campers the last couple of months. No, they haven't.

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Speaker 1: Actually this whole year, this whole year has been very difficult.

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Speaker 1: Started out great weather aided comp right, we had a

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Speaker 1: very mild winter compared to the year a year ago,

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Speaker 1: and then since then it's been all downhill. I mean,

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Speaker 1: I'd say the biggest thing going on here is the

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Speaker 1: growing gap between eating at home versus away from home.

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Speaker 1: I think a lot more people are, you know, just

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Speaker 1: cutting back on lunch or dinner visits and deciding to

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Speaker 1: either cook at home or brown bag their lunch because

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Speaker 1: the gap is at a record high. We've never seen

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Speaker 1: it this high um. And you know, and and it's

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Speaker 1: all ties back to labor. Restaurants are very labor intensive,

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Speaker 1: and I you've done some terrific work, and I just

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Speaker 1: want to highlight it because you know, on the terminal

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Speaker 1: B I go Bloomberg Intelligence and and following it more broadly,

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Speaker 1: might you've done terrific work on the minimum wage movement

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Speaker 1: give or pay everybody fifteen dollars an hour? It has started,

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Speaker 1: for example, to the steps are being taken in New

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Speaker 1: York City. But rest he said, very labor intensive, and

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Speaker 1: restaurants rely on sort of entry level jobs dishwashers, you know,

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Speaker 1: the lion cooks, where they may not be getting fifteen

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Speaker 1: dollars an hour, but they might be people who wouldn't

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Speaker 1: get a job otherwise. And if I'm a small business

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Speaker 1: in a very tight margin business, like a small restaurant,

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Speaker 1: how am I going to pay people fifteen bucks an hour?

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Speaker 1: A lot of them can't. I mean, like you said,

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Speaker 1: it's a low single digit, mid single digit margin business.

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Speaker 1: Really there's not much room here. And and they've actually

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Speaker 1: restaurants have quote a break because food costs are down.

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Speaker 1: So you know what's gonna happen when when commodity prices

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Speaker 1: turned back up. UM, what's gonna happen. What we see

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Speaker 1: happening is greater investment in automation technology. So what a

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Speaker 1: lot of chains are doing now, UM are testing kiosks

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Speaker 1: because frankly, millennials want this. They don't want to even

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Speaker 1: take their headphones off to talk to somebody. They just

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Speaker 1: want to keep them in order via kiosks, sit down

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Speaker 1: and get their food. UM. So we're they're testing it already,

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Speaker 1: and they're especially looking at states like Washington and California

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Speaker 1: and Washington d see where they're gonna have fifteen dollar

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Speaker 1: minimum wages because the r I on the automation technology

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Speaker 1: is better. But if you raised minimum the minimum wage

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Speaker 1: to twelve dollars or fifteen dollars across the country, you're

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Speaker 1: gonna see these changes start to accelerate. Uh, the investment.

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Speaker 1: So you also see at casual dining chains, chains like

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Speaker 1: Texas Roadhouse, Buffalo Wild Wings, they're testing handheld servers so

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Speaker 1: every time somebody takes your order, they don't have to

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Speaker 1: go to the POS system in type. I don't like

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Speaker 1: it at the report when I just put my put

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Speaker 1: put my cap something and then someone comes over I'm

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Speaker 1: just not a fan and I was. I worked in

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Speaker 1: the restaurant business for many years. Yeah, a lot of

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Speaker 1: people like the human interaction. At the high end, you know,

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Speaker 1: people definitely will want to continue to have that UM

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Speaker 1: service and feel the hospitality of of places like the

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Speaker 1: Union Score Hospitality Group UM. But on the on the

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Speaker 1: lower end, you know, there's not too many ways out

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Speaker 1: of this other than automating for these you know, fast

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Speaker 1: casual and casual dyning chains. I'm going to give you

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Speaker 1: the secret see here that there was something called the automat,

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Speaker 1: and the automat you put your change in a little window,

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Speaker 1: in a little box and you could open the door

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Speaker 1: and you get your sandwich out of the automat. So

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Speaker 1: there's there's the answer to all that. It's gonna be

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Speaker 1: like the Jetsons, right right, Well, yeah, they're coming home

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Speaker 1: to rust um talking about the Jetsons. What are the

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Speaker 1: companies who are the best makes of the technology and

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Speaker 1: the implementers of the technology in order to get rid

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Speaker 1: of these repetitive tasks. Yeah, So it's interesting because it's

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Speaker 1: very disperate. There's not a very um these like family

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Speaker 1: businesses or like slicing, dicing, packaging, moving convey I mean

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Speaker 1: you know, yeah, so you know that that Yeah, that's

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Speaker 1: I I peeling. But um no on the on the

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Speaker 1: technology side, there's not any really pure plays. Um, you know,

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Speaker 1: I think your best bet is to kind of um,

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Speaker 1: who's doing it the best then who. McDonald's is ahead

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Speaker 1: of the curve. You know in Europe some of their

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Speaker 1: markets already have this rolled out Kiosk rolled out in

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Speaker 1: all of their restaurants, so, um, that has enabled them.

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Speaker 1: They haven't really spoke too much about it because it's

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Speaker 1: a franchise and they don't want to give out their business.

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Speaker 1: But um, they have been able to cut back labor.

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Speaker 1: McDonald's is very careful not to say, look, we're gonna

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Speaker 1: cut jobs because that typically creates some blowback. And they're saying,

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Speaker 1: you know, we're going to create a different service environment.

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Speaker 1: We're gonna speaking of big, big, big names. A quick

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Speaker 1: final question you have about maybe thirty seconds. Uh, Starbucks

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Speaker 1: might be a very important company to watch in this regard.

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Speaker 1: Very So it's interesting because they were very supportive of

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Speaker 1: a fifteen dollar minimum wage. They're very they pay their

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Speaker 1: employees pretty well. Most people in the business want to

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Speaker 1: work at Starbucks. Um, but what's happened since they've raised

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Speaker 1: the minimum wage is that they've had employees complaining about

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Speaker 1: aggressive cutbacks of hours. And there's a petition out there

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Speaker 1: with over ten thousand votes, people saying, you're cutting my hours,

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Speaker 1: you raise my pay. It's it's a wash. What are

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Speaker 1: we doing? So it's a very good example of what's

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Speaker 1: going to happen in the business. Mike Haalen, Senior restaurant

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Speaker 1: analys for Bloomberg Intelligence. Bloomberg Intelligence, this is what it's

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Speaker 1: all about, unique real time research context on industries like this.

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Speaker 1: You've got to watch it on the Bloomberg and this

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