Oh really?
Wendy’s is preparing to test an “Uber-style” surge-pricing model where the cost of menu items will fluctuate throughout the day based on demand — meaning a Dave’s burger will cost more during the lunch or dinner rush.
The fast-food chain’s unappetizing plans, set to be tested in a high-stakes rollout next year, will squeeze more money out of already inflation-battered Americans who may not have the option to eat their meals during “off-peak” hours.
Wendy’s CEO Kirk Tanner announced the new system on a call with investors, noting the Ohio-based company will invest $20 million on high-tech menu boards that will be able to update prices in real-time without incurring additional overhead costs.
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Come 2025, Wendy’s is implementing a dynamic pricing model that will see prices fluxuate throughout the day based on demand, meaning items will cost more during the breakfast, lunch and dinner rushes.
“As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase further supporting sales and profit growth across the system,” said Tanner, who rose to the chief role earlier this month.
Tanner didn’t put a ceiling on how much the dynamic pricing model could spike the cost of a meal or whether the base price would actually fall during slower periods.
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Representatives for Wendy’s — which has more than 6,000 locations nationwide — would not say how much prices could fluctuate.
“Dynamic pricing can allow Wendy’s to be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value,” a Wendy’s spokesperson told The Post.
“We will test a number of features that we think will provide an enhanced customer and crew experience.”
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Wendy’s is investing $20 million in digital menu boards to be able to update its prices at a moment’s notice.
Prices on items, like the iconic Dave’s Single, already vary depending on location.
For instance, a Dave’s Single costs $5.99 at an outpost in Newark, NJ, while that same quarter-pound burger costs $8.19 at a Wendy’s in Times Square.
“Guess people better change their lunch hours from 2pm to 4pm. With all of the concern of rising prices, the last thing you want to have to consider is how much will it cost you for a burger and fries depending on the time of day,” Ted Jenkin, CEO of Atlanta-based wealth management firm oXYGen Financial, told The Post.
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Wendy’s new CEO Kirk Tanner announced the imminent dynamic pricing model during a call with investors earlier this month.
“This isn’t any better than what we see going on with guilt tipping right now. It will prey on the fact that people can’t remember what the price was yesterday or the week before. It isn’t a Taylor Swift concert, it’s a burger, fries, and a Frosty.”
Industry experts warned that Wendy’s should expect backlash when it tries to hit up hungry diners with ever-shifting prices.
“There are people who view dynamic pricing as a rip-off,” restaurant analyst Mark Kalinowski told The Post.
Added restaurant consultant Arlene Spiegel, “It won’t fly and guests will be very upset. You can’t surprise a guest with, ‘Your meal will cost another 50 cents or $1 today.’”
Wendy’s is the most expensive fast-food chain in the US after menu costs rose 35% due to inflation between 2022 and 2023, according to data from consumer transparency platform PriceListo.
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An Uber user noted the ride-care company was trying to charge her more than $80 to commute 10 minutes to work during a rush-hour rainstorm last year.
Franchise owners contend that dynamic pricing is more about helping with scheduling and easing the burden on kitchen staff during peak hours – as opposed to maximizing profits.
“I think there’s a lot of room for consumers in terms of price amounts they’re going to accept,” Faizan Khan, a Dog Haus franchise owner, said at the recent Restaurant Finance and Development Conference, according to Food & Wine. “Generationally, I think we’re seeing this being acceptable.”
The restaurant industry has been talking about dynamic pricing for years after witnessing the success enjoyed by the airline, hotel and transportation industries. Competitors like McDonalds and Burger King will surely keep a close eye on Wendy’s experiment, experts said.
“I think it’s just a matter of time before it becomes commonplace in the restaurant industry because it’s a way to generate more profits by being smarter about your pricing,” Kalinowski conceded.
