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No, Wendy's isn't trying surge pricing. Here's what it's changing

Wendy's is clarifying that there's a difference between "dynamic pricing" and "surge pricing" in its restaurants.
No, Wendy’s isn’t trying surge pricing. Here’s what it’s changing
Posted at 2:05 PM, Feb 28, 2024

Don't worry; your late-night Wendy's stop isn't going to cost you any more than usual.

The fast-food brand is pushing back on reports that it would soon begin testing a surge-pricing menu, a tactic used by companies like Uber to garner more dollars during the day's busiest times.

The idea stemmed from a Feb. 15 earnings call, when Wendy's CEO Kirk Tanner said the company will begin testing "more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling" as early as 2025.

But even though "dynamic" is often used interchangeably with "surge" in pricing terms, there's apparently a huge difference for the Baconator bunch.

In a statement Tuesday, the company said it has "no plans" to raise prices when demand is at its highest in its restaurants and that any features it tests would be "designed to benefit our customers and restaurant crew members."

Namely, Wendy's said its initiative to add digital menu boards to U.S. company-operated restaurants would offer the flexibility to change the display of featured menu items and offer discounts to customers at different points of the day, particularly in the slower times, the company said. 

Launching this initiative by the end of 2025 is set to cost the food brand about $20 million. It also plans to invest $10 million over the next two years to support global enhancements to the digital menu, including AI-enabled menu suggestions based on weather and time of day.

SEE MORE: McDonald's, Wendy's win federal lawsuit over burger size advertising

"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 company said in a statement to Scripps News.

While the company seems to clarify its focus on the slower parts of day, demand-based pricing is often focused on the opposite, drawing the sharp criticism it gained from its initial misinterpreted comments.

One X user said, "surge pricing is just price gouging by [another] name." Another said "Wendy's 'surge pricing' scheme is about one thing: corporate greed."

And although Wendy's customers apparently don't have to worry about the company adopting the tactic, this criticism hasn't stopped other companies from doing so.

Rideshare companies like Uber and Lyft use surge pricing based on factors like weather or rush hour. The former says the higher prices "ensure that those who need a ride can get one" and "lets the Uber app continue to be a reliable choice."

It's also used in ticketing services, and whether it's for an airline or a concert (hello, Ticketmaster) consumers have pretty much had to accept the higher prices when there's no other alternative.

Still, many companies say that surge pricing is for the customers' benefit. Uber says it lends to lower prices to consumers in a normal-demand setting, and some restaurants that have turned to the tactic say it allows them to stay open during the nontraditional eating windows.

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