Wendy's is trying out dynamic pricing. It's not as Uber as it sounds. | Mashable.
Wendy's is trying out dynamic pricing. It's not as Uber as it sounds.
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| Credit: Mike Kemp / In Pictures via Getty Images |
UPDATE: Feb. 28, 2024, 11:39 a.m. GMT. Wendy's has since clarified in a statement to Mashable that it "will not implement surge pricing." Rather, it may experiment with variable pricing strictly to lower prices when their restaurants are quieter.
"We have no plans to [raise prices when demand is highest] and would not raise prices when our customers are visiting us most," Wendy's wrote in a new blog post on Tuesday. "Digital menuboards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day."
Original article follows.
Wendy's will soon trial surge pricing. This is the world that capitalism has wrought.
Announced during Wendy's Q4 2023 earnings call and first spotted by Nation's Restaurant News, the fast food chain revealed it would begin testing "dynamic pricing" as early as next year. Like Uber's surge pricing, this would cause the cost of Wendy's menu items to fluctuate according to demand, growing more expensive when there are more customers in need of a feed.
So if you wanted to grab a Baconator for a midday treat, you may find yourself paying more than if you'd waited until after the lunchtime rush.
CEO Kirk Tanner said that Wendy's intends to invest $20 million to install digital menu boards in all company-owned restaurants by the end of 2025, which will no doubt make it much easier to execute its surge pricing plans.
"We are always focused on improving the customer and crew experience, and in that spirit, we are leveraging technology in our restaurants even more," said Tanner. "We expect our digital menu boards will drive immediate benefits to order accuracy, improve crew experience, and [prompt] sales growth from upselling and consistent merchandising execution."
In addition to dynamic pricing, Tanner stated that Wendy's will begin implementing different offers according to the time of day, with a particular focus on increasing breakfast sales. It will also trial "AI-enabled menu changes and suggestive selling," with these changes expected to start rolling out next year.
It's a bit like your waiter suggesting the perfect red to go with your steak, only instead of a rib eye and wine it's a Loaded Nacho Chicken and Classic Chocolate Frosty, and instead of human waitstaff it's a machine learning algorithm.
Personally, I find that part of the appeal of fast food franchises is that you know exactly what you're getting. A Dave's Double at your local Wendy's should be exactly the same as one from the other side of the country, a rule which must also extend to its price. Fluctuating surge pricing flies in the face of this fast food law, removing the comforting certainty that you'll be able to grab an affordable meal whenever you visit such an establishment.
Of course, rather than just bumping up prices when there's a crowd, Wendy's might strictly discount current prices during quiet moments in order to lure more customers in — a change few would object to.
In a statement to Mashable, Wendy's said that its AI-enabled menu changes and suggestive selling tests would be "based on factors such as weather."
"As we’ve previously shared, we are making a significant investment in technology to accelerate our digital business," said Wendy's. "Wendy’s has always been about providing high quality food at a great value to our customers and this recent investment will continue that by driving traffic and providing value during slower parts of the day."
Tanner also provided a brief update on the rollout of Wendy's AI chatbot. Revealed last May, Wendy's FreshAI was created in partnership with Google Cloud, and aims to automate drive-through orders with voice recognition. The technology had been implemented in four Wendy's restaurants across Columbus, Ohio as of December, with more planned.
According to the CEO, Wendy's restaurants using FreshAI have seen "ongoing improvement in speed and accuracy."
"This technology also plays a key role on our restaurant team, enabling the crew to focus on what matters: preparing fresh, high quality Wendy’s favourites and building customer relationships to bring them back time and again," said Tanner. It's unclear how said relationships will be built if diners won't actually be speaking to workers anymore.
Topics Artificial Intelligence
They’re already the most expensive fast food restaurant and now they want to try this. I like their spicy chicken, but not that much.
ReplyDeleteThis comment has been removed by a blog administrator.
DeleteI don't know where you live, but here in Winnipeg, Wendy's is the cheapest fast food restaurant.
DeleteJunior bacon cheese burgers are $2.49 here.
You can't get a cheaper burger than that at mcdonalds, or any other fast food restaurant.
As for "wanting to try this"..
Why on earth would you be against them lowering prices throughout the day?
Tennessee. Average cost at Wendy’s is north of $15
DeleteWho says they're going to lower prices and not just raise them during busy hours?
Deletelol, Wendy's said it. Did you not read the article you are commenting on?
DeleteThey said regular prices during peak times will stay the same, and during slow times they will be lowered.
jr bacon cheese burger is $2.29 here. A mc donalds cheese burger is $3.49.
DeleteSo, wendy's is over $1 cheaper than any other fast food place for a burger
Oh I see they clarified, everyone had been assuming it would go the opposite way yesterday
DeleteThey already have surge food quality: sometimes you go and it's a 3 out of 10 and sometimes it's a 1 out of 10.
ReplyDeleteRidiculous idea, some people depend on these places for their only means of getting a somewhat inexpensive meal.
ReplyDeleteit's not the fault of the company who provides a service to a voluntary clientele.
Deletehome made food is much more inexpensive than any restaurant
DeleteIf I understand correctly they are not raising the prices, they will still have the same price, but if you eat during the slower times there will be a discount so it would actually work out good for those on a tight budget, just means you eat after the lunch hour. It will work out well for me since I dont generally eat lunch until after 1pm, closer to 2pm so I would get the discount.
DeleteWhat about the people who work with a lunch hour that isn't flexible? Same with dynamic tolls in cities.
ReplyDeleteit would seem they are going to pay higher prices.
Deletei think that is the point lol
DeleteThey aren’t known for consistency in food experience .. it’s a dice roll every time .. need to master that part first
ReplyDeleteIf I understand correctly they are not raising the prices, they will still have the same price, but if you eat during the slower times there will be a discount so it would actually work out good for those on a tight budget, just means you eat after the lunch hour. It will work out well for me since I dont generally eat lunch until after 1pm, closer to 2pm so I would get the discount.
ReplyDeletegood for you, what about your Dinner at 11:59 pm?
ReplyDeleteI dont eat dinner (supper at midnight). I rarely go for fast food at night anyway, its a lunch time thing.
ReplyDeleteThis is a great idea.
ReplyDeletehttps://media.tenor.co/AQz3_zaiD14AAAAC/hysterical-laughter.gif?t=AAX3DBk_bTkKVPYUzQlXMQ&c=VjFfZmFjZWJvb2s&itemid=25735842&fbclid=IwAR09GCh60k1gB-L5RhVx_CqaMRrkh1PqZw7BUgogHKQ_fJnmObROeSTj7NI
Deletewhat are you smoking.. and I want none of it lol 😉
Delete❤️
ReplyDeleteThe cost to make the food doesn’t change, which is why people are going to boycott.
ReplyDeleteDuring busy hours they have more employees working so the cost does go up.
Deleteummm no it doesn’t. Those employees are there for what, 8 hours? Their pay isn’t going up for two hours during their shift. That’s the point.
DeleteTheir workforce is mostly part time so yes they have more help when it’s busy. DUH!
Deletelol ok 👍
DeleteWhoever had this genius idea should be fired. And the CEO, who is willing to give it a try, should also be fired.
ReplyDeleteI will never patronize a company that thinks it’s OK to charge some customers more than others for the exact same product.
ReplyDeleteso you never shop sales?
ReplyDeletePoor choice on their part. Just another way to end their business.
ReplyDeleteTheir food is fast food. Some of it is ok. However, as these places increase their prices, we really.e the taste isn’t that great.
Lots of places to eat at.
Dynamic pricing = Screwing customers.
ReplyDeleteThere is no luck. I can assure you they set a floor for pricing but not a ceiling. The floor is what it went for when prices were standardized. I won't be eating there again as this is utter BS. A lot of people work, have specific lunch breaks and set aside just enough money to pay a specific price. Now it will fluctuate possibly day to day.
ReplyDeleteI love their determination to get us cooking and eating at home again.
ReplyDeleteNot going to Wendys - or any other restaurant- that does this. It’s gouging, plain and simple. 😡
ReplyDeleteWhen will the board be taking their vote of “No confidence”?
ReplyDeleteOff hour discount? They’ve been doing that in Florida for years, it’s the Early Bird that gets the French fry….
ReplyDeleteInstead, they could do what other fast food restaurants like Taco Bell and Arby's do and add a happy hour from 2-5, which discounts a couple items during the slow times to drive business, instead of just picking a busy time and charging more hoping that scares people into going at the non busy times.
ReplyDeleteEither way, I'm done with Wendy for even speaking this into existence. I bet the CEO thought he was doing something genius on that call. 🙄
Well,they just Lost My business.
ReplyDeleteSurge pricing is illegal during time of state of emergency why should we allow it otherwise
ReplyDeleteOne restaurant I wouldn't mind seeing fail; which I believe is what they're trying to avoid by doing the surge pricing.
ReplyDeleteI will dynamically go to another fast food place.
ReplyDeleteMaybe Wendy's can try getting a few orders correct instead of going up on already overpriced food.
ReplyDeleteNever
ReplyDeleteYour food is not worthy for this endeavor ! Stock holders better sell off now ..
ReplyDeleteSo, does that mean prices go down when they're not busy. " I'm the only customer here right now. I guess that means I get that combo meal for $0.25."
ReplyDeletecongrats. You understand what dynamic pricing is.
DeleteI don't think it will quite work that way. It'll be standard price, standard+, or standard++ it will never drop below the standard. That's dynamic in one direction.
DeleteI understand the standard is the base rate. I'm just exaggerating to make a point.
They've officially backed away from this (see the update at the start of the article). You know they were going forward with surge pricing until they saw the backlash.
ReplyDeletePeople are going to go somewhere else.
ReplyDeleteNot eating there any more.
ReplyDeleteAmericans use your consumer power to say NO.
ReplyDeleteAh, yes. Wait in a long line and pay more. Brilliant business tactic.
ReplyDeleteInstead of these franchises pulling our shirt over our heads all the time and doing whatever they want. I think people should start standing up and just stop going. Let them bankrupt themselves We are supporting all the wrong businesses.
ReplyDeleteIt’s a really bad idea. The only thing that would help you is if you charge less during slow hours and regular price during peak time if you charge more during peak time, forget it.
ReplyDeleteThat’s ridiculous
ReplyDeleteNo longer a customer.
ReplyDeleteThey are still around?
ReplyDeleteAbout to get a dynamic boycott.
ReplyDeleteJust wrong
ReplyDeleteWHO KEEPS THEIR DOORS OPEN? YOU DO!!
ReplyDeleteQUIT BUYING FAST FOOD!!!!
Sorry! It’s high traffic time! 4 for 4 is now 4 for 6!
ReplyDeleteNope
ReplyDeletegood luck going out of business! ✌🏼
ReplyDeleteNo one read the article. No one at Mashable did any research. Nice job inducing panic, Mashable
ReplyDeleteread the article again, there an updated announcement from Wendy’s today that they are not going to do surge pricing. However this same information was posted on other sites yesterday (without the update) and I believe Good Morning America covered it too. My guess is that Wendy’s got an overwhelmingly negative reaction and decided it was in their best interests not to do this.
DeleteDon’t airport wendys already do this?
ReplyDeletewhy
ReplyDeleteLol, not what Wendy's said.
ReplyDeleteThey said price would not increase. It would only decrease.
So .
You either pay the regular price you always paid, or you pay a discounted price.
The author struggles in reading comprehension.
Yes how this Country is turning out to be
ReplyDeleteIf I were a business owner, I would have a price range for the menu items. The people who come through the drive thru and use manners and have patience will get the lowest price, and the people who lack manners and patience will see higher subtotals. The maximum price is reserved for people who make bigoted comments, and the food won’t start cooking until it has been paid for.
ReplyDeleteTake that fatties
ReplyDeleteLike we need another thing to get concerned about. Just bring your own lunch to your workplace and leave these greedy commerces to rot in hell. The problem is that we support this trend, others will follow suit. Don't be so dumb.
ReplyDeleteYeah they're already expensive and the quality of their Foods going to crap
ReplyDeleteActually, no they're not. Too much negative feedback?
ReplyDeleteAnd fuck you too
ReplyDeleteLee now if we crash in their drive through at 10 pm at least we will pay less for food
ReplyDeleteHow to fuck your customers 101
ReplyDeleteThat’s an a-hole move. No thank you.
ReplyDeleteSo...DONT GO. When they get no business...maybe they will find out its not working. Stop bitching about it...just stop going. 🙄🙄🙄🤦♀️🤦♀️🤦♀️
ReplyDeleteThe only fast food restaurant I will go to. If another one offered a baked potato or chili I’d be happy to never go to a Wendy’s again. Awful service and I’ve had gross potatoes and wrong orders (not sure how they can mess up potato/chili order but they do)
ReplyDeleteNo, just no.
ReplyDeleteI stop by the Wendy’s drive thru near my office for breakfast occasionally. I am typically the only one in line, while everyone else is at McDonald’s or Dunkin Donuts down the street waiting in a long line. I don’t think surge pricing is going to help bring people through the door.
ReplyDeleteIdiotic.
ReplyDeleteI’m waiting for the videos of irate customers to be posted
ReplyDeleteYesterday, sure sounded like they were raising prices during busy times.... 🤔
ReplyDeleteOverpriced without the BS.
ReplyDeleteAnyone Struggling with Bill’s or Debt’s⁉️
ReplyDeleteI’m 🅿️aying 5 💸 Grands To The First 5 People To Message Me “HELP” God Bless America 😇💰
You will ALWAYS pay more at Wendy's
ReplyDeleteI heard about this on the radio yesterday, what a crock of 💩 .. To put it simply, if say a cup of coffee that sells for $2 normally sells more during the hours of 7am to 10am than that cup of coffee may sell for $2.25 or $2.50 during those busy times. They are currently testing a tracking system to analyze their items and will eventually be integrating it into their restaurants with automated digital display boards that will change the prices in real time.
ReplyDeleteNo more Wendy's
DeleteThe idea is also supposed to be that the prices go down during the slower periods to try and encourage people to show up at 'low volume' times of day when the staff might not have much work (which doesn't spread on social media like the outrage side of things does), but this sort of thing rarely lands on the side of the customer.
Deletethat's how it should work but not how they described it working on the radio. It was all peak hours and inflated prices. What I want to know is is that cup of coffee going to be 1.50 or 1.75 during low times?
DeleteWhatever is the slightest bit compelling and the most profitable, I imagine.
DeleteReminds me of the Pizza Pizza subscription. It's possible that these places don't expect anything from this except free marketing too.
almost like how gas prices work. You will never know what you will pay until you get there.
Delete"UPDATE: Feb. 28, 2024, 11:39 a.m. GMT. Wendy's has since clarified in a statement to Mashable that it "will not implement surge pricing." Rather, it may experiment with variable pricing strictly to lower prices when their restaurants are quieter."
DeleteJust saw they updated this morning .. guess they received a huge outlash (and rightfully so)
DeleteThis comment has been removed by a blog administrator.
DeleteWell it's safe to say that the Wendy's of old is long gone so who really cares. I go there like maybe once every 3 months. Their food is shit now.
ReplyDeleteI think the takeaway message is get a good cup and brew it at home
ReplyDeleteSorry for the political opinion in advance lol
ReplyDeleteBut One of the million reasons I prefer capitalism over socialism is that the choice is put on the individual.
If you don’t like a specific companies cup of coffee, pricing, political opinion you can simply go to their competition. There’s customers for both sides of the competition. And cash flow for both. However the better run business will do better.
The other option we have is to do it ourselves. Start your own business and compete or brew your own coffee and save money.
The point being we always have a choice…..
I for one have been staying away from Al of them.
Why would I pay $15.75 for a crap burger and fries that’s usually cold, old or not what I ordered. When I can go to a place like Manhattans Bar and Grill for a way better burger and fries for under $10 on a Monday?
Have a friendly person serve you make sure your order is right and so on.
They know you by name, they help out local charities ect.
There are so many small businesses that you can go to that not only has a better product and better services but the pricing is on par with a crappy fast food place.
You are right to voice your opinion on this. I agree with you.
I just wanted to state my opinion:)
Another reason to make coffee at home🤦♀️
ReplyDeletethe source used is not totally credible... but here is the CBC version. they have been doing it for years on many things not mentioning price increases.. and what they are talking about isnt drastic fluctuations but they are going to test the market to see what drives people where and how. It is kind of despicable to think that there would be changes to begin with rather then static pricing because its not like it costs them more during different times and even if there are more staff during those time the aadded volume eats up that argument.
ReplyDeleteit's going to happen just as the "resort fees" came into play for hotels etc... just a matter of when... and parking fees too like hilton and their $75 per night in Niagara
the source used is not totally credible... but here is the CBC version. they have been doing it for years on many things not mentioning price increases.. and what they are talking about isnt drastic fluctuations but they are going to test the market to see what drives people where and how. It is kind of despicable to think that there would be changes to begin with rather then static pricing because its not like it costs them more during different times and even if there are more staff during those time the aadded volume eats up that argument.
ReplyDeleteit's going to happen just as the "resort fees" came into play for hotels etc... just a matter of when... and parking fees too like hilton and their $75 per night in Niagara
Craving a Frosty? Better get it on a slow day — if you're going to a Wendy's that'll be testing dynamic pricing in the U.S., that is. The company recently announced in an earnings call that it would launch the experiment at some locations as part of its new digital menus to be launched next year.
The idea is that the cost of menu items, such as the fast-food giant's signature frozen dessert, will fluctuate throughout the day, and might even cost more when demand is high.
After media reports noting the change were published on Tuesday, Wendy's responded, saying it won't increase prices during the busiest times at its restaurants — and that it isn't implementing "surge pricing," which the spokesperson said was distinct from dynamic pricing.
A summary of the earnings call posted on the Wendy's website refers to "dynamic pricing" and "upsell capabilities" in a slide touting its new digital menu boards.
The company is testing more "enhanced features" such as this one alongside its digital menus, said CEO Kirk Tanner during the earnings call.
Customers likely won't see big difference, says analyst
Most consumers will already be familiar with surge pricing, thanks to ride share services such as Uber and Lyft, event-ticket companies such as Ticketmaster, and the gas station, of course.
But "the opportunity is huge in the restaurant industry," said Robert Carter, a restaurant industry analyst and managing partner at Stratton Hunter Group.
Restaurants have historically used a fixed-pricing model, though early bird specials and limited time offers have long been used to draw customers in during slow hours or toward specific menu items, Carter said.
A similar pricing model has been used elsewhere in the fast-food industry. The price of McDonald's menu items differs based on location, an investigation by CBC Radio's Cost of Living found in July 2023.
The prices are set by individual McDonald's franchisees who oversee each location, factoring in rent, supplies and labour. But when Wendy's launches its experiment next year, customers might not notice the shift in prices — because it will likely be minimal, according to Carter.
"I think what you're going to see is a surge pricing that is in the pennies," said Carter. "I don't think this is going to be something where you see, all of a sudden, a dollar fluctuation or something of a noticeable difference."
Expected to drive traffic during slow hours
The company is testing the approach alongside the rollout of its new digital menu board system, which was part of a $30-million US investment that included other features like an automated drive-thru ordering system, according to notes from the company's February earnings call.
"One of the other benefits of these investments will be the flexibility to change the menu more easily and to offer discounts and value offers to our customers through innovations such as digital menu boards," a spokesperson for Wendy's told CBC News in a statement.
completing the comment ( was too long )
DeleteWhy McDonald's menu items are different prices, even in the same city
Springsteen's 'dynamic' ticket prices just the latest twist in Ticketmaster saga
The spokesperson added that the change is expected to drive traffic during slower parts of the day. When asked if the changes will take effect in Canada, the spokesperson said the experiment will be confined to some U.S. locations for now.
It's only a matter of time, said Carter. "I think we'll see how this fares in the U.S. and then I expect it will roll out into Canada."