Is anyone surprised that a fast-food restaurant is trying to eek out more profit from customers? Wendy’s is coming in with dynamic, or surge, pricing as soon as early 2025. What this means is, depending on the criteria the company deems impactful to your ordering, the price of your order could fluctuate. Interestingly, they do give some details on what criteria that is, and it is going to upset some of you reading this.
Kirk Tanner, CEO and president of Wendy’s, participated in an earnings call with investors where the information about A.I. enhancements was discussed. According to Arstechnica.com, Wendy’s is planning to invest $20 million in digital menu boards (McDonald’s already has them) by the end of 2025. They are planning to invest another $10 million over two years to improve behind the scenes things such as accuracy and upselling customers on items. So, $30 million dollars over the next two to three years to try and make you biggie size your combo.
What Is Dynamic Pricing and How It Could Affect Your Food
Before I get into this, I want to mention there is no information from Wendy’s on prices being discounted. It seems the focus of this is to raise prices.
According to People.com Wendy’s will be implementing artificial intelligence (A.I.) to manage the pricing of items including raising the price.
People continue with how this pricing model is like what Uber uses for its ride share program. Busier times will see higher prices for food.It gets even better, or worse depending on how you feel about this. The AI will apparently be programmed to offer “suggestive selling” during non-peak hours.
Pulled from People’s article, “Historically, companies just set one price that was constant across time. Pricing algorithms allow companies to change prices throughout the day or perhaps even throughout an hour,” University of Michigan professor of economics Zach Brown told Good Morning America.
Yep, the prices could change within the hour. Got an indecisive eater in your group? That could cost you. How is this going to affect people with poor social skills, those that take longer than others to choose their food?
It could mean higher prices for them. It is sad but this is potentially the result of lingering too long making a choice at the AI enabled kiosks.
Please note, that scenario, while I hope it is not the case, could very well happen. No information at this time concerning “locking down prices” is available so technically they could change as you scroll menu items and categories.
It Gets Worse, for Your Wallet
If you are unlucky be in a Wendy’s during what they consider “peak time” then expect to pay more than “non-peak hours”. GoodMorningAmerica stated this new dynamic pricing could result in customers paying $1 extra for a Baconator sandwich for instance.
Staying with People, it is reported that conditions that can affect the price you pay include some interesting things. Obviously demand, lunch or dinner rush is going to be a focus point for inflated pricing, oops, I mean, A.I. enhanced experience for your wallet.
The weather is another concern Wendy’s A.I. will keep in mind when adjusting prices. Does this mean if the weather is bad the prices will be higher? In the Arstechnica.com Tanner does mention that on hot days, soda’s may be pushed harder in the menu. Based on what we know so far, presumably the price will be higher on hot days too as the A.I. attempts to price gouge, I mean, maximize profits.
What are your thoughts on Wendy’s introducing surge/dynamic pricing to their stores? Will you just go during “non-peak” hours, or does it matter to you? You are going to get that Baconator no matter the cost.
Let me know in the comments below.
