(Daily Mail) Wendy’s is planning to charge different prices depending on the time of day – which means a Dave’s Single could cost more at lunchtime than mid-afternoon.
So-called dynamic pricing would boost traffic when restaurants are quiet and cool demand when they’re busy.
Such a system might mean that at busy times like breakfast, lunch and dinner, prices it advertises on a digital menu will be higher and at quieter times they will fall.
For example, a Dave’s Single quarter pounder currently costs around $5.99 at a Wendy’s in Newark, New Jersey.
Under the new system that could increase by a dollar at lunchtime and drop by a similar amount during the post-lunch lull.
Wendy’s new system will begin testing in 2025 and rely on ‘digital menu boards’, in which it will invest $20 million, according to its CEO Kirk Tanner. That will mean it will be able to update prices in real-time and at little to no expense.
A Dave’s Single quarter pounder currently costs around $5.99 at a Wendy’s in Newark, New Jersey. Under the new system that might vary throughout the day depending on the demand
Wendy’s CEO Kirk Tanner said the fast food chain would use ‘digital menu boards’ as a way to alter the listed cost of its menu items
Although consumers are familiar with constantly changing prices for airline tickets and concerts, as well as ‘surge pricing’ when booking an Uber, the bold move would make Wendy’s the first fast food chain to implement dynamic pricing for meals.
If it pays off, the chain will boost sales and potentially improve margins. On the other hand, it risks alienating consumers who always expect to pay a fixed price for a meal regardless of when they visit.
‘They could shoot themselves in the foot by introducing something customers aren’t ready for,’ said Steven Suranovic, an associate professor of economics at George Washington University.
‘If people feel like they’re getting gouged, they’re not going to take kindly to this dynamic pricing strategy,’ he said.
In fact, 52 percent of more than 900 consumers surveyed by software company Capterra last year said they considered dynamic pricing in restaurants to be price gouging.
‘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,’ said Tanner during an earnings call this month.
Wendy’s CEO Kirk Tanner (pictured) said the company will invest $20 million on ‘digital menu boards’ over the next two years
