Wendy’s Wants to Start Uber-like Surge Pricing in 2025

Huckleberry

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Wendy’s will start experimenting with surge pricing, much like Uber and Lyft, as the company rolls out digital menus to all its United States restaurants by 2025, according to the company’s February earnings call. Under the test, burgers, Frosties, and other menu items will have “dynamic prices,” costing more during times of increased demand.

“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing,” said Wendy’s CEO Kirk Tanner on Feb. 15’s earnings call. “We are planning to invest approximately $20 million to roll out digital menu boards to all US company-operated restaurants by the end of 2025.”

 

Jon

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wife was craving a Frosty like a year or two so ago. I hadn't had Wendys in years so being the good husband I am, I went to our closest Wendy's and found it had closed years ago. So I went to the next closest I was aware of and it too had closed. So then I googled "Wendy's near me", found a location and got her one. She had about a third of it, felt gross from it and tossed it. Can't imagine this will affect me in any way at this point but still feel it is a dumb idea
 

AWRTR

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Wendy’s will start experimenting with surge pricing, much like Uber and Lyft, as the company rolls out digital menus to all its United States restaurants by 2025, according to the company’s February earnings call. Under the test, burgers, Frosties, and other menu items will have “dynamic prices,” costing more during times of increased demand.

“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing,” said Wendy’s CEO Kirk Tanner on Feb. 15’s earnings call. “We are planning to invest approximately $20 million to roll out digital menu boards to all US company-operated restaurants by the end of 2025.”

Sounds like I won't be eating at Wendy's anymore.
 
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Ledsteplin

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I haven't eaten at Wendy's since the '80s. If it works well for them, others may follow suit. The Wendy's here doesn't ever look that busy anyway. Even during peak times.
 

Padreruf

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I once ate at one regularly...but since I rarely eat commercial/fast food hamburgers -- or anything like that -- they will not reach me. An interesting thread/poll would be to see how many of us are like that. I would rather have a Jersey Mike's sub than fast food...
 
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2003TIDE

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TBH Wendy's hasn't been good since Dave died.

Surge pricing implies that locations are busy enough to increase pricing. To Jon's point I just don't see it. Plus you have articles coming out like this where consumers are already reacting negatively to increased prices.

 
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CrimsonJazz

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I'm not entirely sure when the last time was that I went to a Wendy's, but it's gotta be getting close to the decade mark. Still, this is an interesting idea simply because I only eat twice a day. I prefer my first meal around 10:00 AM and having an early dinner. If it catches on, I can see how this would benefit people with eating habits like mine.
 

mdb-tpet

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Hard pass. The last thing we all need is variable pricing dependent upon the time of day you buy something. I walked 2 miles home the last time Uber prices shot up due to surge pricing. I'll walk right on past any fast food joint that has variable pricing during the day. Capitalism can be good sometimes, and then there's times like this.
 

Chukker Veteran

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My first thought was do they discount food during off hours? I don’t eat at Wendy’s but if this caught on it would only seem fair to cut the price a little during the slow time of day.
 

Its On A Slab

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I've not eaten fast food since December of 1994, so I can't see this affecting me.

That said, it seems like a dumb idea - I suspect it will simply drive customers to other choices.
Dang. I admire your perseverance.

But I have to admit that even the smell of fast-food nauseates me. When I'm forced to take the kids to get takeout fast food, I park my car outside for hours after we arrive home and open all the windows.

People have this YOLO attitude about what they eat. I am always thinking: OK, as long as you realize that heart disease in your 40s didn't just sneak up on you.
 

Bodhisattva

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Hard pass. The last thing we all need is variable pricing dependent upon the time of day you buy something. I walked 2 miles home the last time Uber prices shot up due to surge pricing. I'll walk right on past any fast food joint that has variable pricing during the day. Capitalism can be good sometimes, and then there's times like this.
I'm curious how you come to this conclusion (in bold). The market will determine if this is a idea that succeeds or not. (Will Wendy's lose customers? Probably some. Will said customers just eat there at off peak hours or go somewhere else entirely? Will the increased revenue from dynamic pricing more than compensate for any lost sales? I'm sure Wendy's has done their market research to make an informed guess and has decided it's worth a try. All final answers TBD.) If this plan works we'll see more of this at fast food joints. If not, then we won't. I don't see it as good or bad. It's ultimately the consumers to decide what happens.

Sometimes I prefer variable pricing. This has been done at places like Disney at peak season. If my family wants to go to Disney or Universal, I prefer higher prices to the point that the park is less crowded. I'm essentially paying a little more to get rid of some of the people ahead of me in line.

Similarly, parks also have fast passes (or equivalently named options), where you can pay a premium to skip normal lines. We do this when we go to Halloween Horror Nights at Universal. The attractions are the same; the wait time experience is a lot different. It's up to the individual consumer what they want.

Back to burgers, if I'm really jonesing for a Wendy's (and not a competitor's) burger at peak lunch hour, I'll pay a little extra to satisfy that craving. In the aggregate, Wendy's will discover what the elasticity of demand is for the products. And they will adjust accordingly.

Like a lot of people here, I'm not fan of Wendy's (or McDonalds or Burger King). Since I'm not part of their target market, I don't care what Wendy's does and they don't care about me.

The only fast food I periodically crave is Popeye's. My occasional inelastic demand is not a toleration of dynamic pricing (they don't have it), it's my toleration of them constantly screwing up my order and being extremely inefficient (long wait times). But, I love their spicy chicken, so I tolerate the abuse. :p
 

CrimsonJazz

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I'm curious how you come to this conclusion (in bold). The market will determine if this is a idea that succeeds or not. (Will Wendy's lose customers? Probably some. Will said customers just eat there at off peak hours or go somewhere else entirely? Will the increased revenue from dynamic pricing more than compensate for any lost sales? I'm sure Wendy's has done their market research to make an informed guess and has decided it's worth a try. All final answers TBD.) If this plan works we'll see more of this at fast food joints. If not, then we won't. I don't see it as good or bad. It's ultimately the consumers to decide what happens.

Sometimes I prefer variable pricing. This has been done at places like Disney at peak season. If my family wants to go to Disney or Universal, I prefer higher prices to the point that the park is less crowded. I'm essentially paying a little more to get rid of some of the people ahead of me in line.

Similarly, parks also have fast passes (or equivalently named options), where you can pay a premium to skip normal lines. We do this when we go to Halloween Horror Nights at Universal. The attractions are the same; the wait time experience is a lot different. It's up to the individual consumer what they want.

Back to burgers, if I'm really jonesing for a Wendy's (and not a competitor's) burger at peak lunch hour, I'll pay a little extra to satisfy that craving. In the aggregate, Wendy's will discover what the elasticity of demand is for the products. And they will adjust accordingly.

Like a lot of people here, I'm not fan of Wendy's (or McDonalds or Burger King). Since I'm not part of their target market, I don't care what Wendy's does and they don't care about me.

The only fast food I periodically crave is Popeye's. My occasional inelastic demand is not a toleration of dynamic pricing (they don't have it), it's my toleration of them constantly screwing up my order and being extremely inefficient (long wait times). But, I love their spicy chicken, so I tolerate the abuse. :p
Thanks to off-season pricing, I have scored some hella-good deals from the casino/hotel industry. My wife and I recently scored a $300 per day room at the Silver Slipper for a third of that price. Less money spent on the room means more money for doing something else.
 
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Go Bama

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After my first round of chemo, most food didn't taste the same. I ate Dave's singles daily and they tasted fantastic. So I like Wendy's, though I haven't been to one in several months now.

It's hard not to eat fast food when you are on the road as much as I am. If I can afford the time, I'll stop at a meat and three type place. If I don't have the time, it's McD's, Arby's, Wendy's, or Subway, whichever one shows up first.

At this point in my life, dying of a heart attack sounds like a pretty good idea, not because I'm anxious to go, but would like to avoid end stage cancer. So...I pretty much eat whatever I'm in the mood for.

I think this is a terrible idea for Wendy's, but agree with Bodhi that the market will decide. If I were the CEO of Wendy's, I would fear losing loyal customers permanently.

One thing I notice about fast food chains is not all stores are the same. On Sundays when I take my daughter to Memphis for symphony practice, I have to carry food, because I haven't found anything decent to eat in the area around Memphis University, whether it is fast food or a sit down restaurant.
 
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crimsonaudio

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One thing I notice about fast food chains is not all stores are the same. On Sundays when I take my daughter to Memphis for symphony practice, I have to carry food, because I haven't found anything decent to eat in the area around Memphis University, whether it is fast food or a sit down restaurant.
Belltower (525 S Highland St. - right on the strip) is quite good. You should check it out. Great coffee, too.

 
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