Wendy’s recently met a massive public outcry from consumers after indicating it would experiment with dynamic pricing. Ultimately, Wendy’s denied the idea that it would ever participate in surge pricing, i.e. that it would use dynamic pricing to increase prices during times of high demand. But Wendy’s use of the phrase “dynamic pricing” at all certainly implied a planned foray into Uber-like pricing systems where prices can suddenly leap. A recent report from restaurant technology provider Qu indicates this is only the beginning. Wendy’s may have been the first to put fast food surge pricing onto the public’s radar. But it seems like many other brands and restaurants are also eyeing a shift to dynamic prices.
Who would have thought that good old ink on paper was preventing us from experiencing this much stress? It seems obvious now. But we guess we never thought much about how a difficult-to-change menu… Well, it prevents things from shifting on a whim. But that appears to be a thing of the past. In its 5th “Annual State of Digital Report,” Qu highlighted some 2024 trends in Quick Service Restaurants (QSRs) and Fast Casual brands that relate to the advent of surge pricing in the fast food industry. It is important to note that the report gathered data from 179 brands across 62,000 locations. It can be found in full here.
The two main takeaways the report shares concerning surge pricing in the fast-food restaurant world are as follows:
- Dynamic pricing is one of the top three things that brands plan to use AI for in 2024. (Dynamic pricing falls only slightly behind AI-driven analytics and AI-driven voice ordering.)
- Digital menu boards are the #2 technology investment fast food restaurants have planned for 2024.
Taken together, these trends point firmly toward planned surge pricing in the fast food world. AI investment is an overall top trend for restaurants in 2024. And 39% of those surveyed point to dynamic pricing as an AI priority for 2024. That makes dynamic pricing a priority in an already prioritized space. Of course, we could kindly imagine, as Wendy’s suggests, that dynamic pricing will suddenly take on a new meaning in the marketplace and be used to create discounts. But, it seems much more likely that fast food brands will investigate how prices can dynamically surge up versus shift down. The intense investment in digital menu boards, of course, underscores this point. Dynamic pricing surges will require fast food restaurants to have easily changeable platforms.
So, given that fast-food restaurants are clearly investing in the idea of dynamic and surge pricing, where does that leave consumers? Well, like with all modern shenanigans caused by digitizing everything, nowhere good. If prices consistently change, it could become difficult to even know when a cost is higher than it should be. And if all fast food places use surge prices, there may be nowhere left to turn. Of course, there’s always the grocery store (for now, anyway). Hopefully we’ll see some oversight around this nascent area for food and tech. In the meantime, we’ll have to hope one public outcry at a time will keep astronomical prices at bay for our burgers and fries.
