Wendy’s leverages digital tech to test “surge pricing”

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Wendy’s is set to experiment with Uber-like surge pricing, a concept referred to as “dynamic pricing,” starting in 2025. This initiative will be supported by a $20 million investment in new digital menu boards across its U.S. locations, enabling real-time price adjustments based on demand. The announcement was made during a recent earnings call, highlighting Wendy’s effort to innovate within the fast-food industry by utilizing technology for menu flexibility, including AI-enabled changes and suggestive selling.

The new digital menu boards, part of an overall redesign of the Wendy’s experience, have already been introduced in some locations. They feature automated voice ordering and on-screen add-on suggestions, representing a shift towards more technologically advanced service options. This move aligns with Wendy’s goal to enhance customer service, improve order accuracy, and drive sales growth through upselling and consistent merchandising execution.

Dynamic pricing is commonly used in other sectors, such as ticket sales for sports and concerts and ride-hailing services, where prices adjust in real-time based on demand. However, its application in the restaurant industry has been limited due to the operational challenges of manually changing menu prices. Digital menus and apps facilitate easier implementation of dynamic pricing by allowing fast food chains to adjust prices automatically.

Wendy’s digital order sales are projected to hit $2 billion this year, with an additional $15 million allocated to app improvements. McDonald’s has also explored dynamic pricing and enhanced order-suggestion features at some locations. However, the inconsistent pricing across its franchises has led to customer frustration over affordability.

Sources include: CNN

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