Wendy’s Unveils Dynamic Pricing Model

Choose wisely. Choose Wendy’s new pretzel Baconator.

The latest Baconator isn’t the only new item hitting Wendy’s menu. The fast food giant planning to test out dynamic pricing as early as 2025. It’s a practice that charges different prices for the same items based on demand throughout the day. For example, a cheeseburger and fries could cost you more during the lunch rush than during a down period.

I would never expected a fast food restaurant to do that.

On a call with investors. Wendy’s CEO Kirk Tanner says his company will invest $20 million on digital menu boards, allowing customers to see the updated prices.

Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day part offerings, along with AI-enabled menu changes and suggestive selling

Fast food restaurants are already dealing with blowback on soaring prices from their customers, as stories of $18 Big Max and $7 Egg McMuffins at McDonald’s went viral. Now adding dynamic pricing to the mix could potentially be damaging to the industry.

I don’t think anyone’s going to pay extra for the exact same thing that they were getting for less.

In fact, one survey finding 36% of consumers would order less often from restaurants adopting the practice.

They’ll have to be really careful about not angering consumers who are already kind of inflation wary.

And that’s actually what’s made the industry very sort of hesitant to dive fully in. There are definite risks involved, and they really don’t want to anger customers.

But these fluctuating prices are nothing new to inflation fatigued consumers, who are used to seeing surging prices on everything from airlines to concert tickets, like Taylor Swift’s Eras Tour Ticketmaster drama.

But oh my gosh. We spent $899 per ticket. Dynamic pricing is the worst.

And rideshares like Lyft and Uber notoriously face backlash from consumers when riders see unexpected costs.

Usually Uber’s like 8, $10. Tonight it was like 50 something bucks. Little did I know about search price.

But experts say this is a rare move from the fast food industry, which has been hesitant to sink its teeth into varying prices.

This would be a big deal for restaurants if this was widely adopted.

And it’s really going to depend on how customers react. If customers are okay with it, you’ll see more of it. And if Wendy’s test doesn’t work for whatever reason, you might not see it that often.

So we reached out to Wendy’s, telling us in a statement overnight this, “Dynamic pricing can allow Wendy’s to be competitive and flexible with pricing, motivate customers to visit, and provide them with the food they love at a great value.”

Ugh. I mean-

He’s got a bad taste in his mouth.

I have to say, I mean, it feels like we’re constantly being taken advantage of as customers. Is it reasonable to believe that if Wendy’s does this, that everyone else will follow suit?

It’s a test that begins in 2025. We asked the other chains, we asked Burger King, we asked at McDonald’s. They didn’t respond. But KFC said it “has no plans at this time to try dynamic pricing on its menu.” The fast food industry has been reticent to do this in the past. But we’ll see if these new menu boards, dynamic menu board… Look, if the burger’s cheaper later in the day, that might entice me, to be honest.

I know, but if you work a shift and your lunch hour is between 12 and 1 and you just have time to go grab a burger and that’s the time that they’re priced the highest, that would just be incredibly frustrating.

They’re busier, so it’s slower and it costs more.

I don’t think of fast food like an airline ticket. I don’t. But that’s the same kind of model, like the airline ticket model.

Thanks for making us angry, [inaudible 00:03:36]. Thank you.

You’re welcome. I am your fast food outrage correspondent.

There you go. There you go. As Craig said, ugh.

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