Wendy’s, the renowned burger chain with a vast network of 6,000 outlets across the country, has unveiled plans to introduce variable menu pricing next year based on the time of day. This innovative pricing strategy means that popular items like the Baconator could see a price increase of $1 during peak dining hours.
Zach Brown, an economics professor at the University of Michigan, explained to “Good Morning America” the shift from traditional static pricing to dynamic pricing enabled by algorithms. This approach allows for price adjustments throughout the day or even within an hour to reflect demand changes.
Wendy’s CEO Kirk Tanner announced a significant investment of $20 million in advanced digital menu boards capable of real-time price updates. This move aligns with the dynamic pricing models already employed by various service industries, including ridesharing apps like Uber and Lyft, as well as airlines and hotels. Brown noted that this strategy not only boosts profits during high-demand periods but also encourages customers to dine during off-peak times when prices are lower.
Despite the potential benefits, the announcement has met with some skepticism from the public. One user on X, previously known as Twitter, criticized the concept, equating surge pricing to price gouging.
In response to the mixed feedback, Wendy’s stated that the goal of dynamic menu pricing is to remain competitive and adaptable, enticing customers with excellent value for their favorite meals while enhancing the overall experience for both customers and staff.
Industry observers speculate that this move by Wendy’s could set a precedent for other fast-food giants, such as McDonald’s and Burger King. Should Wendy’s dynamic pricing model prove successful in boosting its financial performance, it could lead to broader adoption of similar pricing strategies across the fast-food sector.
This is NOT going to end well for Wendy’s. Customers that feel price gouged will not return, IMO.