The company attempted to raise and lower prices throughout the day based on demand, which sparked a backlash.
Wendy's, an American fast food chain, is looking to test having the prices of its menu items fluctuate throughout the day based on demand, a strategy that has already taken hold among ride-sharing companies and ticket sellers.
During a conference call this month, Wendy's CEO Kirk Tanner said the Dublin, Ohio-based burger chain will begin testing dynamic pricing, also known as surge pricing, next year.
“Starting in 2025, we will begin testing more enhanced features such as dynamic pricing and time slot offers, along with AI-enabled menu changes and suggestive selling,” he said.
“As we continue to showcase the benefits of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting system-wide sales and profit growth.”
Wendy's plans to invest about $20 million to launch digital menu boards in all of its company-operated restaurants in the U.S. by the end of 2025. It also plans to invest about $10 million over the next two years to support the improvements to digital menus worldwide.
Tanner, a former PepsiCo executive, became CEO of Wendy's this month. He succeeded Todd Penegor, who had served as president and CEO of Wendy's since 2016.
Last year, Penegor announced a restructuring aimed at speeding up decision-making and investing more in the development of new restaurants, particularly abroad. The chain and its franchisees operate around 7,000 restaurants worldwide.
Wendy's stock fell slightly in Tuesday morning trading as the move sparked a backlash and the New York Post put the story on its front page, calling it “inflation's next frontier.”
On the social media website X, formerly known as Twitter, many users attacked Wendy's and some said they would never eat at the burger chain again.
“The price increase works for Uber because it is practically the only option. You are not. Rest assured, I will not be returning to your restaurant… if that is something you move forward with.” one user said.
“Goodbye, Wendy's” another said. “Predatory pricing is not an option for fast food.”
