UPDATE:
Wendy’s released a statement Tuesday stating that the company would not use surge pricing at any of their establishments.
The fast-food chain said they have invested in high-tech digital menu boards that can be updated in real-time.
“We said these menuboards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants,” the statement reads. “We have no plans to do that and would not raise prices when our customers are visiting us most.”
“Any features we may test in the future would be designed to benefit our customers and restaurant crew members. 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. Wendy’s has always been about providing high-quality food at a great value, and customers can continue to expect that from our brand.”
ORIGINAL COPY:
Wendy’s is planning to roll out dynamic pricing for its fast-food offerings starting as early as next year.
The chain will start testing the new pricing system “in some U.S. restaurants,” Wendy’s said in a statement to Global News. There are currently no plans to introduce this system in Canada — at least, not yet.
Dynamic pricing, also known as surge pricing, is the practice of setting flexible prices for products and services, meaning the price paid by customers can fluctuate based on market demands. Uber is a high-profile company that famously employs dynamic pricing. During busy times, the price of an Uber car-share ride is generally higher than during lower-traffic periods.
“We are making a significant investment in technology to accelerate our digital business,” Wendy’s said of the change. “In addition to evolving our loyalty program, one of the other benefits of these investments will be the flexibility to change the menu more easily and to offer discounts and value offers to our customers through innovations such as digital menuboards.”
The company says this new policy is aimed at driving sales “during slower parts of the day” and “based on factors such as weather.”
“As early as 2025, we plan to test a number of features such as AI-enabled menu changes and suggestive selling based on factors such as weather that we think will provide great value and an improved customer and crew experience,” Wendy’s states.
Wendy’s CEO Kirk Tanner discussed the policy during a conference call earlier this month.
“As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system,” he said.
According to the company’s fourth-quarter earnings, Wendy’s plans to spend approximately US$30 million to “support a rollout of digital menu boards to all U.S. Company-operated restaurants by the end of 2025 and digital menu board enhancements for the global system over the next two years.”
Tanner, a longtime PepsiCo executive, became Wendy’s CEO earlier this month. He succeeded Todd Penegor, who had served as Wendy’s president and CEO since 2016.
Last year, Penegor announced a restructuring intended to speed decision-making and invest more in new restaurant development, particularly overseas. The chain and its franchisees operate about 7,000 restaurants worldwide.
Shares of Wendy’s fell slightly in Tuesday morning trading.
— With files from The Associated Press