Word that Wendy’s restaurants will soon deploy surge pricing — changing the cost of items based on demand — isn’t going over well with fast-food America.
“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling,” Wendy’s CEO Kirk Tanner said Monday. “As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system.”
Lowering the price of a burger at, say, 11 p.m. might make fast-fooders happy. But boosting the price just because it’s noon and everyone’s trying to eat lunch is angering some.
“If I ate at Wendy’s, I’d sit in the drive-thru waiting for the surge pricing period to end,” wrote one consumer on the social media platform Threads, according to USA Today.
“If they jack the price up after a certain amount of time, that is not accommodating the customer,” said Kerry Mcaulliffe, a Boston customer, CBS News reported. “You know what I would do? I would go to Star Market, buy some cold cuts and have my sandwich myself because this is crazy.”
The company countered the report on its plan, saying in a Tuesday statement, “Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice.”
Surge pricing is employed by many companies. Perhaps the best-known example is Uber: Try to get a car at rush hour, and it’ll cost you more than at 10 p.m. Amazon and other online retailers use algorithms and artificial intelligence to monitor competitors’ prices, then raise or lower their own based on the information.
But past experiments for using surge pricing for food and drink items haven’t gone so well. Ten years ago, Coca-Cola tried to use dynamic pricing in Atlanta, with vending machines changing prices based on the weather.
“It was an unmitigated disaster. A lot of consumer pushback and a lot of people quite angry on a hot summer day,” Jay Zagorsky, an economics professor at Boston University’s Questrom School of Business, told CBS.
He added, “With Uber and Lyft, or even surge pricing for the Boston Red Sox, there are not a lot of alternatives. With Wendy’s, many of them are located quite close to things like Burger King or McDonalds. “If you have a choice in a few-block radius, why go to the place where they are raising prices?”
Social media exploded with scorn. “Lol at Wendy’s for thinking their food is good enough to get away from this. My feeling is this will drive people away from them in droves,” one person wrote on Reddit.
“And they will make every part of the day a ‘rush.’ Breakfast rush, lunch rush, after-school rush, early bird rush, dinner rush, after-dinner rush, pre-going out for the night rush, bar-closing rush. … Those prices are never going down,” wrote another.
Yet another pointed out that some companies have tried this and gone out of business: “This is how JCPenny screwed itself. They got rid of sales for everyday low prices and lost all their customers who loved the sales.”
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