FERNDALE, Mich. (WXYZ) — Starting in 2025, the Wendy's fast food chain said it plans to test "dynamic pricing." Similar to an Uber or Lyft rides, prices on the menu will fluctuate based on demand.
The AP reported Tuesday that during a a conference call earlier this month, Wendy’s CEO Kirk Tanner said that chain will start testing dynamic pricing, also known as surge pricing, as early as next year.
“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling,” he said, according to the AP. “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.”
7 Action News spoke with Wendy's customers outside of metro Detroit locations in Ferndale and Oak Park.
"That don’t even sound right," Caroyln Easterly said. "I think it’s more of a ripoff, too, that they benefiting and we still losing out."
Darius Wilder said, "I’m really thinking about that. This is a first."
Nicholas Toth said it could be a good thing for Wendy's and the consumer if the customer can time their visit just right when prices are low.
However, he said, "Usually, I get the same thing every time when I come here, so if it’s more one day then it is the other day, (then) I don’t know how I’ll feel about that honestly.”
Wendy's said it's investing $20 million to upgrade the current menu boards to digital menu boards at company-run restaurants, and the boards will be powered by AI, or artificial intelligence.
Wilder figures the success of dynamic pricing depends on the demographics.
“If you’re in (an) area where there’s a huge lunch rush, then it may be, might be somewhat justified. But if it’s a location where the business can be flat regardless, if they come, they come, if they don’t they don’t, that’s going to be a bit tricky to implement," Wilder explained.
Ellen Adele Harper said, "Ha, I think it’s ridiculous and I don’t think it’s going to work. I think they’re going to lose money on it.”
She said there are too many other choices for food with a consistent, fixed price.
“For instance, right next to this Wendy’s there’s a McDonald's, and it’s not like Uber or Lyft where there’s only two companies to choose from,” Harper said.
Wendell takes a more diplomatic view.
“It’s going to be kind of like a toss-up. You might lose customers. You might not,” he said.
Wendell said the proof will be in the frosty.
“Experience has taught me that you pay for what you get and you get what you pay for. So, if you’re getting good service, you’re getting good quality of food (and) there’s not doubt about it either. You’re going to come no matter what price change comes about or what price change doesn’t come about," he explained.
Wendy's full statement below:
"Earlier this month we issued our fourth quarter and full year 2023 earnings results and included an update on investments we are making in our digital business. One initiative is digital menuboards, which are being added to U.S. Company-operated restaurants. 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. 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."
