When you buy something through one of the links on our site, we may earn an affiliate commission.
Fast food giant Wendy’s is exploring a bold new strategy that could shake up the industry: dynamic pricing or as you may be more familiar, surge pricing. It’s similar to what ride-sharing apps like Uber use in their pricing models except in this case, it would be used for higher priced burgers depending on various factors.
According to the chains CEO, this new pricing method may start testing in 2025.
This peculiar move means the price of your favorite Baconator or Spicy Chicken Sandwich could fluctuate based on factors like demand, time of day, and even weather. Imagine a scenario where a Wendy’s in a busy downtown area charges more for its burgers during peak lunch hours, similar to how Uber hikes fares during rush hour.
On February 15th, CEO Kirk Tanner brought up the implementation of the concept during an earnings call: “We will begin testing more enhanced features like dynamic pricing and daypart offering, along with AI-enabled menu changes and suggestive selling.”
Uber uses “surge pricing”, a pay mode that raises or lowers the price of a ride depending on the time of day, availability of drivers, supply and demand…and whatever ese the algorithmic gods deem fit.
Caleb Silver, editor in chief of Investopedia spoke on the model, and how it could influence Wendy’s business: “Wendy’s foray into dynamic pricing is a bold experiment that could help the chain be more efficient and ultimately profitable if it works. But, it does run the risk of angering and losing customers since they actually have many choices, unlike the rideshare industry.”
What Would the Benefits be of such a Move?
- Increased revenue: Proponents argue that dynamic pricing could help Wendy’s maximize profits during peak periods.
- Improved efficiency: By adjusting prices based on demand, Wendy’s could potentially better manage inventory and staffing levels.
Potential Drawbacks:
- Backlash: Customers might be unhappy with unpredictable pricing, especially for a brand known for its value offerings.
- Loss of brand identity: The “Fresh, Never Frozen” slogan emphasizes consistency and affordability, and dynamic pricing could contradict this image.
In other exciting Wendy’s news, the chain confirmed a new dessert in partnership with another popular brand, the Cinnabon Pull-Apart. The Pull-Apart’s will hit the menu nationwide featuring ooey and gooey pastry, dipped in cinnamon, and icing. A perfect snack for anyone on-the-go with a sweet tooth (cough cough).
While we wait and see if Wendy’s decides to embrace surge pricing, we can use the Cinnabon Pull-Apart’s to tie us over!
