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Following tremendous backlash about a report that the fast food chain was planning on trying out surge pricing at its restaurants, Wendy’s now says it won’t be doing it.
On Monday, it was reported that Wendy’s CEO Kirk Tanner recently devoted a portion of an investors’ call to discussing the company’s plan to conduct a test of the viability of surge pricing (also known as “dynamic pricing”).
Dynamic pricing (also known as surge pricing, demand pricing, or time-based pricing) is defined by Business.com as “product pricing based on various external factors, including current market demand, the season, supply changes and price bounding.” It is used by industries like ride-sharing services, event ticketing platforms, hotels and airlines.
The outlet says Tanner used the Dave’s Single (Wendy’s quarter-pound burger option) to highlight how the experiment may work, suggesting the price of that particular item could go up by as much as $1 during peak lunch and dinner hours and have the increase reflected in the digital menus the company will use to constantly update the exact cost.
The idea of “dynamic pricing” didn’t go over very well with many fast food consumers.
Sorry, I like eating there but the only way to ensure that the insanely stupid idea of "surge pricing" for restaurants is never tried again is to make a strong example of @Wendys and push it into bankruptcy.https://t.co/4yoaGlcPvO
— Ari Cohn (@AriCohn) February 27, 2024
It even drew the ire of Senator Elizabeth Warren.
.@Wendys is planning to try out “surge pricing” — that 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.https://t.co/dbJuhAM6vp
— Elizabeth Warren (@SenWarren) February 28, 2024
On Tuesday, Wendy’s walked back their plans to implement surge pricing in a statement, and even went so far as to claim that it was never their plan (despite what the company’s CEO said).
“Earlier this month we issued our fourth quarter and full year 2023 earnings results and included an update on investments we are making in our digital business,” the company wrote. “One initiative is digital menuboards, which are being added to U.S. Company-operated restaurants.
“We said these menuboards would give us more flexibility to change the display of featured items. 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.
“Any features we may test in the future would be designed to benefit our customers and restaurant crew members. Digital menuboards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.
“Wendy’s has always been about providing high-quality food at a great value, and customers can continue to expect that from our brand.”
See? Despite what the company’s CEO said, they were actually only planning on using surge (dynamic) pricing to save people money.