American Wendy’s planning for uber-style ‘surge pricing’ on demand of burger prices fluctuate

American fast food joint Wendy’s announced their plans to roll out surge pricing based on demand; after that, they made headlines at the beginning of next year, like Uber’s surge pricing model, as per Fox Business.

Wendy’s plans to test an “Uber-stylesurge-pricing model to have menu item prices change throughout the day based on demand, meaning a Dave’s burger will cost more at lunch or dinner.

Next year, the fast-food chain will test its unpopular plan in a high-stakes rollout, potentially depriving Americans of more money before inflation, with limited options to eat during “off-peak” hours.

Kirk Tanner, CEO of Wendy’s, announced on a call with investors that the Ohio-based company will invest $20 million in high-tech menu boards that will be able to update prices in real-time without incurring additional overhead.

“We continue to demonstrate the benefits of this technology in our company-operated restaurants, so that franchisee interest in digital menu boards will increase sales and increase profits,” said Tanner, who took the lead role earlier this month.

Tanner did not set a limit on how much the dynamic pricing model could raise food prices or whether the base price would decrease during slow periods.

Representatives for Wendy’s, which has more than 6,000 locations nationwide, would not say how much the prices might change.

American Wendy’s planning

A Wendy’s spokesperson told The Post that “to motivate customers to visit and provide them with the food they love at a great value, the pricing of Dynamic can allow Wendy’s to be competitive and flexible with pricing.” “For enhanced customer and crew experiences, we are thinking of testing several features.”

Prices for items like the iconic Dave Single vary based on location. A Dave’s single costs $5.99 at a New York outpost, while that quarter-pound burger costs $8.19 at a Wendy’s in Times Square, for example.

“Guess people better change their lunch hours from 2 p.m. to 4 p.m. With all of the concern about rising prices, the last thing you want to have to consider is how much it will 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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“It’s no better than what we’re seeing now with the conviction. It suffers from the fact that people cannot remember what the price was yesterday or the week before. It’s not a Taylor Swift concert; it’s burgers, fries, and fries.”

As it tries to hit hungry diners with ever-changing prices, Wendy’s should expect backlash. Industry experts warn about that.

There are people who see dynamic pricing as a rip-off, restaurant analyst Mark Kalinowski told The Post.

Restaurant analyst Mark Kalinowski told The Post that “there are people who view dynamic pricing as a rip-off.”.

“It won’t fly, and the guests will be very upset. You can’t surprise a guest by saying, ‘Your meal will cost 50 cents or $1 more'” a added restaurant consultant Arlen Spiegel.

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Wendy’s is America’s most expensive fast-food chain, according to data from consumer transparency platform Pricelists, after menu prices rose 35% due to inflation between 2022 and 2023.

Franchise owners argue that dynamic pricing is more about scheduling and easing kitchen staff workloads during peak hours than maximizing profits.

Faizan Khan, a Dog Haus franchise owner, believes there is room for consumers to accept different price amounts. The restaurant industry has been discussing dynamic pricing for years, following the success of the airline, hotel, and transportation industries.

Competitors like McDonald’s and Burger King will likely monitor Wendy’s experiment. Experts predict it will become commonplace in the restaurant industry as a way to generate more profits by being smarter about pricing.

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