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Wendy’s, the popular fast-food chain to experiment with an ‘Uber-style’ surge-pricing model

Wendy’s, a popular fast-food chain, is planning to test a surge-pricing model similar to that of Uber, where menu prices will adjust based on demand throughout the day.

According to a report by the New York Post, CEO Kirk Tanner announced this initiative during an investor call, unveiling plans to invest $20 million in advanced menu boards capable of real-time price updates.

The surge-pricing approach aims to capitalize on peak hours, potentially leading to increased costs for consumers already grappling with inflation, especially those unable to dine during off-peak times. With more than 6,000 locations nationwide, Wendy’s intends to implement this pricing strategy next year, sparking concerns about its potential impact on consumer behavior and satisfaction.

Tanner suggested that as they continue to showcase the benefits of this technology in their company-operated restaurants, franchisee interest in digital menu boards should also rise, further driving sales and profit growth across the system.

The $20 million investment will facilitate the installation of digital menu boards capable of adjusting prices dynamically without incurring additional overhead costs.

While specific details on potential price fluctuations during slower periods were not provided, Wendy’s representatives emphasized the flexibility dynamic pricing offers, aiming to remain competitive and deliver value to customers.

However, concerns have been raised about the consequences of dynamic pricing on consumers. Ted Jenkin, CEO of oXYGen Financial, expressed doubt, suggesting that people might need to adjust their lunch hours to avoid potential price increases.

Industry experts caution that constantly changing prices may provoke backlash, with restaurant analyst Mark Kalinowski warning that some may perceive dynamic pricing as exploitative. Arlene Spiegel, a restaurant consultant, predicted that guests would be displeased with unpredictable price variations.

Wendy’s decision comes as the restaurant industry explores dynamic pricing, drawing inspiration from successful implementations in the airline, hotel, and transportation sectors. Wendy’s currently holds the title of the most expensive fast-food chain in the US, experiencing a 35 percent surge in menu costs due to inflation between 2022 and 2023, according to data from PriceListo, a consumer transparency platform.

Franchise owners argue that scheduling and reducing kitchen staff workload during peak hours are more critical objectives of dynamic pricing than maximizing profits.

As Wendy’s prepares to trial the surge-pricing model, competitors such as McDonald’s and Burger King are expected to closely observe its impact on consumer behavior and industry trends.


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