Get Ready To Pay More: Fast Food Company Announces 'Dynamic Prices'
Fast food giant Wendy's is expected to adopt a dynamic pricing model, similar to Uber's surge pricing, as early as next year. This news was revealed by the company's CEO Kirk Tanner during an earnings call earlier this month. The move is a part of the company's efforts to enhance customer experience and remain competitive in the ever-evolving fast food industry.
A spokesperson for Wendy's has confirmed this report to Fox News Digital, stating that the company will begin testing "enhanced features" on their digital menu boards, such as dynamic pricing, AI-enabled menu changes, and suggestive selling based on factors like weather. The spokesperson also mentioned that this pricing overhaul will take place in a number of select locations.
Dynamic pricing, also known as surge pricing, is a pricing strategy where the cost of a product or service fluctuates according to demand or other factors. This is commonly seen in the ride-sharing industry, with companies like Uber and Lyft charging higher prices during peak hours or bad weather. Wendy's is now planning to implement this strategy in its own menu pricing, a move that has received mixed reactions from consumers and experts alike.
Some economists argue that this move by Wendy's could potentially hurt the company's reputation and result in backlash from customers. Associate Professor of economics at George Washington University, Steven Suranovic, told The Daily Mail that customers "could shoot [Wendy's] in the foot" if they introduce a pricing strategy that consumers are not ready for. He also mentioned that this could result in unhappy customers and ultimately hurt lunchtime sales.
However, Wendy's seems confident that this move will not only provide an enhanced customer and crew experience but also make the company more competitive and flexible with its pricing. The spokesperson also mentioned that these dynamic pricing tests would allow the company to remain true to its commitment of providing great tasting, fresh, high-quality food at a great value to its customers.
The fast food industry has been facing significant challenges in recent years, with rising food and labor costs leading to higher prices on menus. Rival fast food chain McDonald's has also been criticized for its menu prices, particularly after their Big Mac combo was priced at almost $18. This led to an outcry from customers and caused the company to promise a renewed focus on affordability.
The New York Post reported that McDonald's has faced a decrease in low-income customers, with many opting to eat at home due to inflation. This reflects the impact of rising prices on consumers and the need for fast food companies to strike a balance between profits and affordability.
In light of these challenges, Wendy's plans for dynamic pricing could be seen as a necessary step for the company to remain competitive and adapt to changing market conditions. However, it remains to be seen how customers will respond to this new pricing strategy.
In addition to dynamic pricing, Wendy's will also be investing $20 million in implementing digital menu boards that would reflect fluctuating prices in real-time. This move is a part of the company's larger efforts to enhance its digital business and provide a more seamless ordering experience for customers.
It is worth noting that this is not the first time Wendy's has made headlines for its innovative customer strategies. In 2019, the company launched a loyalty program called "My Wendy's Rewards" that offered customers personalized deals and promotions. With the introduction of dynamic pricing and AI-enabled menu changes, Wendy's seems to be doubling down on its efforts to stay ahead of the curve in a competitive industry.
Overall, Wendy's plans for dynamic pricing have received a mixed response, with some expressing concerns while others see it as a necessary step for the company's growth. As the company begins testing these new features in select locations, it remains to be seen how customers will respond and if this move will have a positive impact on the company's sales and reputation.