Wendy’s has plans for Uber-like surge pricing as fast-food costs turn off customers
Avoid the burger rush… and save big by nabbing a Baconator at 6 a.m. Wendy’s said it’d begin testing a dynamic-pricing system next year that could pump (or lower) the price of Frostys, burgers, or spicy nuggets depending on demand. Picture a burger combo that costs $10 in the morning costing $12 during a late-night rush. Customers may be used to seeing demand-based pricing on ride-hail apps, gas pumps, and flight-booking sites, but it’s creeping into other transactions.
The burgorithm: Surge pricing is behind subtotals at Disney parks, Bowlero lanes, AMC theaters, tee times, and even Amazon carts.
More like Techny’s: Wendy’s will test dynamic pricing as it rolls out digital-menu boards to its US restaurants (a $20M investment). The square-burger joint has also teased AI-powered drive-thrus and underground delivery bots.
Still fast, just not cheap… Fast-food prices rose 6% last year, 7% in 2022, and 8% in 2021. As dollar menus go the way of the dodo, dwindling sales show that customers are balking at $7 Egg McMuffins. McDonald’s, which hiked prices by 10% two years straight, reported underwhelming Q4 results. KFC and Taco Bell parent Yum Brands also disappointed. Chipotle (which is doing well) has raised prices five times since 2021, and said California subtotals will surge this year after a minimum-wage bump.
Leaving a bad taste is risky… If Wendy’s dynamic-pricing test boosts sales, more fast-food chains could follow suit (it’s easy to implement with digital drive-thru screens and app orders). But there’s also the risk of a salty backlash: more than half of Americans see surge pricing as equivalent to price gouging, while 50% have stopped visiting a restaurant because of price increases.