Wendy’s to test ‘surge’ pricing, some accuse chain of price ‘gouging’

Wendy’s announced a new AI-powered menu that could potentially result in some customers paying more for their food depending on the time of day they visit. The company calls it a dynamic pricing system, and it is set to roll out next year, according to ABC News.

Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.

Point phone camera here

The dynamic pricing system is akin to Uber’s “surge pricing,” but instead of a ride, lunch costs more during peak times. Wendy’s CEO Kirk Tanner said prices will fluctuate based on factors like demand, time of day and weather.

Wendy’s changes come as fast-food chains have seen sales decline. With the new concept, Wendy’s aims to reverse that trend and increase profits, according to Tanner.

The company claims that AI on digital menu boards will lead to more accurate orders for customers, with less chance of human error.

Tanner also told ABC News that the dynamic pricing system may encourage people to dine during traditionally slow times.

Still, some people aren’t sold on the new system.

“Ultimately, the biggest losers would be lunchtime customers,” Steven Suranovic, an associate economics professor at George Washington University, told Fox Business. “If people feel like they’re being gouged, they’re not going to take kindly to this dynamic pricing strategy.”

Suranovic’s prediction may hold true.

Some customers posted their reactions to Wendy’s dynamic pricing system announcement on social media.

“Surge pricing is just price gouging by any other name,” one user posted on X, formerly Twitter. “We really don’t have to put up with these companies price gouging us. Go anywhere else.”

When it comes to pricing, Wendy’s already has a reputation. The fast-food chain reportedly became the most expensive in the U.S. as menu prices rose 35% between 2022 and 2023 due to inflation, according to Pricelisto data.

Wendy’s isn’t the only fast-food restaurant facing customer backlash for pricing.

McDonald’s also raised prices, according to the New York Post. The chain charged nearly $18 for a Big Mac combo at some locations and increased prices for other items.

Fox Business reported that some lower-income customers stopped going to McDonald’s because of the jump in prices, and McDonald’s reported lower earnings than expected for its fourth quarter.

McDonald’s CEO Chris Kempczinski responded to the customer backlash by vowing to become more “focused” on “affordability” in 2024.

More cost-conscious customers have also pushed Taco Bell to emphasize its value menu, as the company promotes its 10 items for $3 deals. KFC is also heeding customers’ calls for affordability, and it is now launching its first-ever loyalty program, according to NBC News.

Meanwhile, Wendy’s told several news outlets that the cost of its new dynamic pricing and digital menus will be around $20 million.