Wendy’s Planning ‘Surge Pricing’ Where Burger Prices Fluctuate Based On Demand

Burger King fries (Courtesy Burger King)

Wendy’s, a prominent fast-food chain, is set to pilot a dynamic pricing strategy akin to the ride-share model popularized by Uber, where menu item prices will vary depending on the time of day and customer demand. This new approach, particularly aimed at periods of high traffic such as lunch or dinner times, means patrons might see higher prices for favorites like Dave’s burger during these peak windows.

The test phase of this pricing model is part of Wendy’s innovative initiatives planned for next year. It comes at a time when consumers are already grappling with the impact of rising inflation on their daily lives. The concern is that individuals who cannot adjust their meal times to avoid peak hours may face steeper costs as a result of the surge pricing.

In an earnings call with shareholders, Wendy’s CEO Kirk Tanner detailed the company’s investment in sophisticated menu board technology. The Ohio-based company is allocating $20 million towards these digital displays, which will allow for instant price adjustments across its outlets, mirroring real-time market demands without adding to operational expenses.

This development marks a significant shift in the traditional pricing strategies employed in the fast-food industry, suggesting a move towards tech-driven, flexible pricing models. Wendy’s aims to optimize business performance in a competitive sector while navigating the complexities of consumer price sensitivity.

“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,” said Tanner, who rose to the chief role earlier this month.

Representatives for Wendy’s would not say how much prices could fluctuate.

“Dynamic 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,” a Wendy’s spokesperson told The New York Post.  “We will test a number of features that we think will provide an enhanced customer and crew experience.”