Wendy’s burned by ‘surge’ pricing
● US burger chain Wendy’s said this week it has no plans to raise menu prices at times of peak demand, after it was scorched on social media for comments its CEO made suggesting the chain may start testing “dynamic pricing”.
CEO Kirk Tanner told investors on a call in February that starting as early as 2025, Wendy’s would begin testing features including “dynamic pricing and day-part offerings”.
Dynamic pricing refers to surge-pricing based on demand, especially during peak hours of the day. Many people associate it with shifting airline ticket prices or how ride-hailing service Uber adjusts fares at busy times. Tanner’s comment sparked an online backlash this week, with some vowing to stack their freezer with the company’s signature “Frosty” milkshakes to hoard for summer months.
Senator Elizabeth Warren, in a post on X on Wednesday, called it “price-gouging, plain and simple”. Wendy’s backtracked, saying in a statement to Reuters that it “would not raise prices when our customers are visiting us most”. Its initiative to add digital menuboards to certain stores would allow it to offer discounts to customers more easily, “particularly in the slower times of day”, the company said.
Wendy’s also claimed the menuboards would provide more flexibility to change the display of featured items, saying Tanner’s comments had been “misconstrued”.
His remark was a hot topic at a restaurant conference in the Dallas area this week, with several executives responding warily to the idea that customers — already skittish after recent price increases — would accept fluctuations in prices.
“I don’t see it taking off any time soon,” said Victor Fernandez, a senior analyst at restaurant analytics firm Black Box Intelligence.
Michael Lukianoff, CEO of SignalFlare.ai, who has consulted with restaurants about pricing for years, said “dynamic pricing” is a great success in other industries such as airlines, but would not work in restaurants. “Customers will shop elsewhere,” he said.
Warren’s post on X, previously Twitter, said Wendy’s plan “means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same. It’s pricegouging plain and simple, and American families have had enough.”