The Taste Bud: Surge Pricing in Store at Wendy’s in 2025?
What’s next? Fast food hamburger auctions? Wikimedia Commons/Rick Obst
Wendy’s, the burger chain, plans to experiment with a surge pricing model, much like Lyft and Uber use. In other words, by 2025, your Baconator may cost more at lunchtime than it might at 3 p.m.
The news came following a Feb. 15 company earnings conference call (you can access the webcast) in which the plan was announced.
“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing,” Wendy’s CEO Kirk Tanner said during the call. “We are planning to invest approximately $20 million to roll out digital menu boards to all US company-operated restaurants by the end of 2025.”
So, if you suddenly get a craving for a Frosty at high noon, that chocolaty treat might run you five bucks instead of the usual $2.69 (or whatever your Wendy’s charges). So at that point, the question becomes, “How much am I truly willing to pay for a classic Dave’s Double with cheese? Eight bucks? Nine? How hungry am I, anyway?”
My feeling is this: The people who frequently eat fast food, those who include it as part of their regular routine, probably won’t be especially fazed by this experiment, assuming their budget agrees. But as someone who infrequently eats fast food – yes, I do occasionally splurge on a Wendy’s spicy chicken sandwich – I might find it way too easy to simply write Wendy’s off entirely. I haven’t set foot in an Arby’s in years, and probably wouldn’t eat one of those mystery meat sandwiches if it was offered to me at no charge. I believe I could easily do the same with Wendy’s, or any other fast-food chain. (OK, maybe not White Castle. But I digress.)
What’s the most you’d pay for this spicy chicken sandwich?
Via Wendy’s Website
Here’s another question: With this sort of fluid pricing, which will be made easy with the digital menu boards, would we be able to theoretically get that $5.79 spicy chicken sandwich for four bucks at 8:45 p.m.? Or would the prices bottom out at their normal rates? Why would a fast-food chain take a chance on underselling in that way? Would that undersell act as a sort of loss leader to get people addicted to certain items, ensuring they will return, even during surge pricing times?
If the former is the case, will people adjust their schedules to gamble on better prices? Because it seems to me that gambling is exactly what that is. At the same time, much like I know better than to try and summon an Uber downtown during the leadup to a U of L home basketball game, we’d all be wise to going to Wendy’s right after work. We would know the prices would be up – so would that stop consumers from rolling into that drive-through lane? And what if there’s only one Baconator left? Will we have to bid on it?
This is unprecedented in fast food, as far as I know. It’s … quite frankly, bizarre, yet somehow interesting. The Wendy’s CEO said during the call that he would expect an immediate sales surge from this “dynamic pricing” model. However, Gizmodo.com cited a Capterra survey in which most consumers (52%) say dynamic pricing is essentially price gouging, while 65% say it makes the decision of where to eat more difficult.
For me, it would make that decision much easier: I would simply make superior food at home or drive past the pigtails and hit a trusted taqueria or other local establishment. I can barely make myself pay regular prices for fast food, but surge pricing? Good luck with that one, Wendy’s.
UPDATE: Following an outcry over the surge pricing suggestion, Wendy’s CEO Tanner walked it back.
