Wendy’s is looking to test having the prices of its menu items fluctuate throughout the day based on demand, implementing a strategy some refer to as "surge pricing" with ride-sharing companies and ticket sellers.
During a conference call earlier this month, Wendy’s CEO Kirk Tanner said that the Dublin, Ohio-based burger chain will start testing dynamic pricing.
According to statement from Wendy's made to TODAY.com, dynamic pricing would help Wendy's be "competitive and flexible with pricing," and motivate customers to visit.
“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,” he said. “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.”
TODAY.com in their story initially compared dynamic pricing to "surge pricing." However, Wendy's clarified how the company plans to use "dynamic pricing" in a statement on Feb. 27.
"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 spokesperson said in an email to NBC News. They added there are "no plans" to raise prices at high-demand times.
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Wendy’s plans to invest about $20 million to launch digital menu boards at all of its U.S. company-run restaurants by the end of 2025 in an effort to improve order accuracy and increase sales by upselling certain menu items, TODAY.com reported. It also plans to invest approximately $10 million over the next two years to support digital menu enhancements globally.
The TODAY.com report went on to say that "Wendy's Fresh AI" has already been rolled out in many restaurants, resulting in "ongoing improvement in speed and accuracy."
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The digital menus will also help to reflect the "fluctuating" prices throughout the day, TODAY.com said.
Tanner, a longtime PepsiCo executive, became Wendy’s CEO earlier this month. He succeeded Todd Penegor, who had served as Wendy’s president and CEO since 2016.
Last year, Penegor announced a restructuring intended to speed decision-making and invest more in new restaurant development, particularly overseas. The chain and its franchisees operate about 7,000 restaurants worldwide.
Shares of Wendy’s fell slightly in Tuesday morning trading.
This story has been updated to reflect Wendy's clarification to TODAY.com.
