Wendy's walks back statement on surge pricing

Wendy's

After media outlets reported the chain would institute dynamic pricing, the company said it won't

UPDATE: After ConsumerAffairs published this story Wendy's said it would not institute "surge pricing" that would lead to higher prices during peak times. The company said it will install digital menu boards that would make it easier to change prices.

“To clarify, Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice,” a Wendy's spokeswoman said in a statement to the media.

However, reporting by ConsumerAffairs and other news outlets was based on comments made by a company executive to analysts. Our original story is below:

Many consumers think of fast food as being quick, convenient, and cheap. But it may not be so wallet-friendly in the coming months, at least not all the time. 

Wendy’s has announced it will start surge pricing menu items – making them more expensive when they’re more in demand – starting in 2025. 

Wendy’s said it would upgrade its restaurants, including better and faster ways for consumers to order food, both in-store and online. With that, comes the decision for surge pricing. 

“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,” Wendy’s CEO Kirk Tanner said in an earnings call. “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.” 

What is surge pricing? 

Surge pricing is common on apps like Uber and Ticketmaster, and now it will continue to migrate to the food industry. With surge pricing, or dynamic pricing, retailers will change their prices depending on the demand when you’re ready to order.

The transition to restaurants has been slower, mainly due to the time and effort it takes to change menu boards. However, with Wendy’s new upgraded restaurants and ordering systems, the menu boards can change digitally. This makes surge pricing possible with a few clicks of a button. 

Wendy’s will invest $20 million to have digital menu boards at all of its locations across the U.S. by 2025. Over the next two years, the fast food chain will work on upgrading to digital menu boards globally. 

How will this affect consumers? 

With Wendy’s surge pricing, if there’s a big dinner rush your order might cost a bit more than during the morning or early afternoon hours when the restaurant is less crowded. Similarly, prices can change depending on how crowded the restaurant is, what the weather is like, and the general demand for certain items. 

Currently, Wendy’s hasn't announced what items will be subject to the dynamic pricing changes. 

It’s also important to note that Wendy’s isn’t the first fast food chain to begin testing this. McDonald’s has piloted it at some of its locations, though consumers continue to complain about the rising prices at the restaurant. 

It remains to be seen what kind of effect surge pricing will have on the fast food market in the coming years. 

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