Downward Angle Symbol A symbol in the form of an angle pointing downwards. Wendy's dynamic pricing changes featured items and offers discounts at different times. Wendy's
- Wendy's is pushing back on suggestions it would raise prices on burgers and fries.
- On an earnings call, the company's CEO said it would experiment with “features like dynamic pricing.”
- Wendy's later said that dynamic pricing would not increase prices and would only provide discounts.
Wendy's appeared to walk back comments from CEO Kirk Tanner on Tuesday that led to widespread reports – and backlash – over the idea that the company would implement price increases on burgers and fries.
“As early as 2025, we will begin testing advanced features such as dynamic pricing and daily specials, as well as AI-powered menu changes and suggestive selling,” Tanner said on the fourth-quarter earnings call.
Dynamic pricing, commonly referred to as “surge pricing,” means that prices fluctuate based on demand – regardless of whether demand is increasing or decreasing.
Similar to the models at Uber and Lyft, people expected Wendy's menu items to vary in price during peak and off-peak times of the day.
The new pricing model was discussed as part of a $20 million investment to install digital menu boards in all U.S. restaurants by 2025. Tanner also said on the call that the company plans to invest an additional $10 million over the next two years to modernize its digital menu boards around the world.
Following the CEO's comments, Business Insider reached out to Wendy's via email to ask for more details, including how much pricing would vary on the new model, which BI's email described as a “crash price increase.” became.
Wendy's responded with a statement about what the digital menu boards would entail, but did not dispute the characterization as a “price increase.”
As word of the new change spread on Tuesday, people took to social media complain and post memes about the possibility of higher prices.
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After online unrest over the new pricing model, a Wendy's spokeswoman, Heidi Schauer, sent an update Tuesday evening saying, “Wendy's will not implement price increases, which is the practice of raising prices when the Demand is at its highest.”
An announcement on the company's website reiterated that digital menu boards would allow stores to more easily change featured items and provide discounts to customers.
The statement said Tanner's mention of dynamic pricing “was misinterpreted in some media reports as an intention to increase prices when demand is highest in our restaurants.”
Wendy's said the digital menu boards will provide customers with discounts and value-added offers, “particularly during quieter times of day.” The post also states that any new features would only benefit the customer.
Once the policy goes into effect, you may be offered discounts when you stop by an empty Wendy's location.
The change is one of several designed to make the company more tech-savvy.
Wendy's is spending $15 million this year to improve its mobile app and loyalty program. The company expects global digital sales to reach $2 billion by 2024, a year ahead of schedule, Tanner said.
Wendy's also plans to continue expanding its AI-powered drive-thru, which it launched in June. The company plans to introduce AI menu changes and sales recommendations based on factors such as weather by 2025, it said in a statement to BI.
February 28, 2024: This story has been updated after Wendy's released a statement saying there will be no price increases on some menu items.