Wendy's to Start Testing 'Surge Pricing'—Here's What We Know
UPDATE: Wednesday, Feb. 28, 2023 at 9 a.m.
Following the publication of this story on Feb. 27, Wendy's reached out with the following statement regarding its dynamic pricing plans: "Earlier this month we issued our fourth quarter and full year 2023 earnings results and included an update on investments we are making in our digital business. One initiative is digital menuboards, which are being added to U.S. Company-operated restaurants. We said these menuboards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants. We have no plans to do that and would not raise prices when our customers are visiting us most. Any features we may test in the future would be designed to benefit our customers and restaurant crew members. Digital menuboards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day. Wendy's has always been about providing high-quality food at a great value, and customers can continue to expect that from our brand."
An updated version of the original story follows below.
How much does it cost to eat at Wendy's? In the future, the answer to that question could fluctuate constantly as the fast-food chain prepares to roll out a new pricing strategy.
During a recent earnings call, Wendy's announced plans to start testing "dynamic pricing" at its restaurants as early as 2025. Also commonly known as "surge pricing," this is a practice in which businesses adjust their prices based on demand, the time of day, or other factors.
Wendy's plans to spend roughly $20 million on installing new digital menu boards at all of its company-owned restaurants in the United States by the end of 2025. The upgrade will be a key factor in rolling out the dynamic pricing strategy because it will allow Wendy's restaurants to quickly and easily tweak their prices.
In a statement shared with TODAY.com, the company said that surge pricing "can allow Wendy's to be competitive and flexible with pricing, motivate customers to visit, and provide them with the food they love at a great value."
However, how Wendy's customers will respond to the pricing strategy remains to be seen. Other fast-food chains, like McDonald's and Taco Bell, have been facing significant online criticism in recent months after raising their prices. While Wendy's hasn't revealed many details about how its dynamic pricing will work, the strategy is already garnering some pushback from consumers worried that the chain will become less affordable.
"Starting today I will no longer be eating at @Wendys. It is wrong to charge 'surge pricing' on food because you are busy," one consumer posted on X, the social media site formerly known as Twitter.
"If Wendy's really does surge pricing that's my last time eating there," another wrote.
When contacted for comment on its dynamic pricing plans and the criticism, Wendy's shared the following statement with Eat This, Not That!:
"As we've previously shared, we are making a significant investment in technology to accelerate our digital business. In addition to evolving our loyalty program, one of the other benefits of these investments will be the flexibility to change the menu more easily and to offer discounts and value offers to our customers through innovations such as digital menu boards, which will roll out in some U.S. restaurants."
"Wendy's has always been about providing high-quality food at a great value to our customers and this recent investment will continue that by driving traffic and providing value during slower parts of the day," the statement continued. "As early as 2025, we plan to test a number of features such as AI-enabled menu changes and suggestive selling based on factors such as weather that we think will provide great value and an improved customer and crew experience."
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