Wendy’s to Test Market “Dynamic” Pricing

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What are the Implications to Consumers?

Will your burger soon cost more during lunch hour than at 3pm? Or an ice cream cone come at a higher price on a hot summer day? How about your morning cup of coffee in the rush hour drive-through?

“Surge pricing” is based on the idea that a vendor’s prices could fluctuate depending on peak and slow times. Which would essentially mean during the busiest time when customers want a product the most, it’s going to cost you more.

Wendy’s announced along with the arrival of their new digital menus, they will be test marketing what they call “dynamic pricing” beginning in 2025. But reaction to the announcement has been less than welcoming. On Wednesday the company issued a statement clarifying that “dynamic pricing” would include new digital menus that “could be adjusted to offer discounts at slower times of the day.”

“We have no plans to do that and would not raise prices when our customers are visiting us most,” Wendy’s declared in a damage control blog post. “Any features we may test in the future would be designed to benefit our customers and restaurant crew members.”

Wendy’s announcement is particularly untimely in light of escalating food prices, both at the grocery store as well as the drive through, and the idea drew ire in reactions on social media.

According to Jonathan Maze, editor-in-chief of the trade publication Restaurant Business, surge pricing could represent a “turning point” in the industry. “If Wendy’s idea works, it could get other (fast food chains) to do something similar.”

Indeed, fast food king McDonald’s recently experimented with dynamic pricing in some of its newly upgraded drive-thrus and on the McDonald’s app. But the action sparked outrage over inconsistent pricing experiences at franchises, and the overall effect on affordability of the chain’s food – the primary reason consumers choose fast food in the first place.

Surge pricing is already practiced in purchasing tickets to sporting and music events, as well as driving apps like Uber. And Wendy’s new digital menus have already appeared in some drive-thrus. TikTok users shared their experiences, which included an automated voice in place of a human worker, and digital suggestions for add-ons appearing onscreen during the order.

Maze pointed out the risk involved in alienating customers who already face inflated fast food prices. “The idea that a restaurant chain would potentially raise prices during busy times of day…could lead to a backlash. They’ll have to tread carefully.”

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