Update as of 2/28/2024: Since the writing of the original article, Wendy’s has officially stated they will not experiment with surge pricing. Wendy’s notes, “We have no plans to do that and would not raise prices when our customers are visiting us most.” And further adds, “Digital menuboards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.” Of course, this update comes after much negative consumer reaction. The original article is below.
Where do we begin on this one? Usually, we’re writing up the latest in streaming shenanigans: price increases, more ads, fewer features, etc. But today… Today, a new evil is rising in the form of fast food shenanigans. Is nothing sacred anymore? It’s bad enough that fast food is barely cheap these days, but now we might have to contend with surge pricing for it. That’s just too much. That’s late-stage capitalism for you, though. In a truly egregious move, Wendy’s has revealed that it plans to experiment with surge pricing, Uber-style. Yes. Wendy’s seems to want to set surge prices so that the costs of its burgers, fries, and more increase during times of high demand. Wendy’s is referring to this as “dynamic pricing,” ostensibly to make it sound more palatable than “surge pricing.” And while I love a Frosty, I will be referring to it as “thanks, but no thanks” pricing.
In news that we first saw on Gizmodo, Wendy’s will begin its surge pricing experiments by 2025. Wendy’s CEO Kirk Tanner shared, “Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing. We are planning to invest approximately $20 million to roll out digital menu boards to all US company-operated restaurants by the end of 2025.”
As you may guess, digital boards are great for multiple reasons, and one of these is changing around pricing on a whim. There aren’t official details on this “dynamic pricing” yet, but we’ll go out on a very short limb and hypothesize that Wendy’s will surge prices during high-traffic times like lunch, dinner, or always. Given the context of the news, an earnings call with investors to discuss the company’s financial plans, it does seem likely increasing profit is the main idea on the table.
After all, Uber, too, refers to its surge pricing model as a “dynamic pricing model.” And even Google’s Oxford Languages dictionary would define the phrase as “the practice of varying the price for a product or service to reflect changing market conditions, in particular the charging of a higher price at a time of greater demand.“
Wendy’s is likely hoping that rideshare surge pricing, as introduced by Uber and Lyft, has softened consumers to the notion. But, personally, I feel they’ll find they’re mistaken. Unlike a Wendy’s burger, folks often defer to surge pricing on Uber because they really have to get where they’re going at a specific time. And there’s most likely little consumer choice available in the area of ride-sharing apps. Cravings can be strong, but it’s unlikely that anyone will really need a Wendy’s burger at 5 pm. Of course, other fast food companies may get in on this surge pricing game, too (see, password sharing in streamers), and then we’re all screwed. At least we can cook at home… I guess until grocery stores also introduce surge pricing. And then, probably, the revolution. It feels like this all should honestly be illegal.
We just hope streamers don’t get wind of this surge pricing notion, or watching shows during primetime is about to get way more expensive. Ultimately, we’re going to strongly suggest that Wendy’s reconsider this surge pricing plan. At some point, if your consumers have no money left because they’re being gouged left and right, they’re not going to spend it. Then, you won’t make money either. Put that in your Frosty and think on it.
Originally published on February 27, 2024.
