Wendy's backs off 'surge' pricing after backlash
Fast-food chain Wendy’s on Wednesday is clarifying recent comments made by its CEO about experimenting with fluctuating pricing of its menu. The company backed down saying they have “no plans” to increase prices.
Many media outlets, including the Detroit Free Press, reported on comments CEO Kirk Tanner made suggesting the chain would start testing the practice of “dynamic pricing.”
“Beginning as early as 2025,” Tanner said according to Nations Restaurant news, “we will begin testing more enhanced features like dynamic pricing and daypart offerings along with AI-enabled menu changes and suggestive selling.”
Tanner made the comments, first reported by Nations Restaurant News, in an earnings call to analysts earlier this month.
In email statements to the Associated Press and NPR, the Dublin, Ohio-based backed down and called the statements "misconstrued."
"To clarify, Wendy's will not implement surge pricing, which is the practice of raising prices when demand is highest," Wendy's Vice President Heidi Schauer said in an email. "We didn't use that phrase, nor do we plan to implement that practice."
Wendy’s said in a media statement that its 2023 earnings included an update to its investments in its digital business such as adding digital menu boards to U.S. company-owned stores.
“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.”
Digital menu boards would “provide them more flexibility to change the display of featured items,” the company said, and be able to easily offer discounts, “particularly in the slower times of day.”
Following the news reports, the Dublin, Ohio-based chain faced backlash on social media about those very changes Tanner suggested.
Surge pricing, Senator Elizabeth Warren posted on X, formerly Twitter “means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same.”
“It’s price gouging plain and simple, and American families have had enough,” Warren posted on X (formerly Twitter.)
Under the model, dynamic pricing, sometimes called surge pricing, is a strategy reflecting different prices for items based on fluctuations in demand. For example, a hamburger or a Wendy’s iconic Frosty could cost more during busy lunch or dinner times. The strategy is similar to “Uber-style” pricing when there is more demand for drivers and few available.
Tanner also said the company is “planning to invest approximately $20 million to roll out digital menu boards to all U.S. company-operated restaurants by the end of 2025.”
Additionally, the company will invest “$10 million over the next two years to support digital menu board enhancements for the global system.”
Contact Detroit Free Press food and restaurant writer Susan Selasky and send food and restaurant news and tips to: sselasky@freepress.com. Follow @SusanMariecooks on Twitter. Subscribe to the Free Press.
This article originally appeared on Detroit Free Press: Wendy's backs off dynamic pricing after internet backlash
