In an unexpected move, Wendy’s is getting ready to test a surge-pricing strategy similar to Uber’s dynamic model, where menu prices will be affected throughout the day based on customer demand. The unconventional scheme, which is to be launched on a larger scale next year, aims to extract more revenue but may cost hungry customers a premium during busy times.
CEO Kirk Tanner unveiled this innovative approach on an investor call, explaining that Wendy’s plans to invest $20 million in state-of-the-art menu boards. These boards will allow real-time updates in prices without additional operating costs. The company hopes to demonstrate the benefits of this technology in its restaurants, which will increase interest from franchisees.
Starting in 2025, Wendy’s will introduce a dynamic pricing model, allowing prices to fluctuate based on demand during breakfast, lunch and dinner rush hours. Although Tanner did not specify the extent of the potential increase or whether base prices might be dropped during slow periods, the move is expected to make Wendy’s pricing strategy more competitive and adaptable.
Wendy’s, which has more than 6,000 locations nationwide, has not disclosed the extent of the potential price fluctuations. A Wendy’s spokesperson said the dynamic pricing is aimed at enhancing the customer experience, providing flexibility and motivation for visits while providing excellent value.
Already, prices for items like the iconic Dave Single vary depending on location, for example, it costs $5.99 in Newark, NJ, and $8.19 in Times Square. Critics are concerned about the impact this will have on consumers, with some suggesting that lunch times may need to be adjusted to avoid premium pricing during peak times.
“Change your lunch plans: Wendy’s new pricing model may have you paying more for burgers depending on the clock!”.