Wendy's to add surge pricing to menu items.

[USGrant1962]

Latest news reports, board chair has overridden CEO, says no surge pricing.

Citation? There was nothing to override. The CEO never said surge pricing, the press made that up.

 

[GrayHare]

They could always spin it to "Wendy's to offer discount at off hours." Same thing, more palatable.

 

[MichaelB]

Citation? There was nothing to override. The CEO never said surge pricing, the press made that up.

During the earnings call the CEO said

Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing

To the casual observer those look like different names for the same thing. Those of us with a lifetime of experience in the corporate world see this as a way to say surge pricing without using the word surge.

Wendy’s is clarifying today that they are not the same, but it’s still unclear exactly what they mean. The fault here is squarely on the Wendy’s executive, not the media.

 

[Al18]

Hmm, I predict a CEO change soon

 

[Midpack]

Here's a source that suggests a distinction between dynamic and surge pricing FWIW. Dynamic pricing has been around for a long time, based on anticipated demand fluctuations due to seasons, days of the week, etc. Examples are seasonal prices (e.g. golf courses, winters), or higher prices on weekends/holidays/certain days (e.g. airlines, hotels, golf on weekends). Surge pricing is newer, where prices can change from minute to minute based on real time supply and demand (e.g. Uber, # active drivers, weather) thanks to smart apps and networks. Whatever you choose to call it, there is a difference.

What exactly Wendy's had in mind we may never know, but $20M for digital menu boards there was something in the mix.

[Dynamic] Airlines began varying ticket prices in the 1980s, Shumsky said, noting that customers grumbled about it at first but eventually came to accept it. Today, the practice of announcing price hikes during peak times is still commonplace. Think higher-priced theme park tickets on weekends.

[Surge] More recently, though, technological advancements have made it easier for companies to make minute-to-minute price changes in real-time based on fluctuating demand. The ride hailing app Uber famously uses surge pricing, hiking prices on rides when weather or other factors cause demand to skyrocket.

https://www.npr.org/2024/02/28/1234412431/wendys-dynamic-surge-pricing

 

[oiseux]

This is straight up loonie in my opinion. Do they have a new CFO? The marketing person must be locked in a closet, pounding on the door trying to get out. snip

Thanks for the good laugh. That describes too many situations I know....

good to see this was a poorly positioned initiative in an IR call..... but I'm certain these things have been discussed, if not there, elsewhere. There are probably people discussing if they should adjust pricing based on ability to pay (nice car? positive signal from their phone app?, up the prices 10%? lots of coupon and savings apps, drop the price by 10% on sides)

 

[Steeler75]

Some CEO’s are just tone deaf. As already mentioned, dynamic pricing to offer discounts during non-peak periods might help but not for increasing prices during peak.

Reminds me of the Kellogg’s CEO recommending serving cereal for dinner as a cost effective alternative…

 

[Qs Laptop]

Sadly, I think it will work and spread. I watch in amazement at the number of Doordash deliveries in my little cul-de-sac.

I wonder how Door Dash and Uber Eats delivery services will adapt to surge pricing?

[edited to add: I just saw the recent posts that surge pricing will not be implemented at Wendy's. Still, I wonder how these delivery services would handle it.?]

 

[Walt34]

Kid avoids fast food on-duty because he doesn't want any 'extras' added to his food while wearing the uniform.

What I did was buy a lunchbox like the one in the picture. It was $15 in 1983 and there is no question that over the next 19 years it saved me over five figures. Pretty good ROI, plus the food was better and healthier.

Edit:
I still have that lunchbox and we do still use it once in a while.

 

[Koolau]

Reminds me of when I was a columnist for a daily newspaper. I never got to write my own headlines because the paper had a dedicated group of a few guys whose only duty was to write all the headlines.
Reporters and writers would frequently complain to the editors about headlines that were only vaguely related to the text of the articles and sometimes even flat out wrong.
The editors could do nothing about it because the headline writers had a union job and were well protected.

Yeah, my sister was a copy reader at a daily. She wrote headlines and also insured that the paper had not libeled anyone with their copy. Of course, that all ended when the paper basically got rid of most of their reporters and just became a rip-and-read perveyor of drivel.

I think all the staff was unionized - not just the copy readers. All the old people got the ax. End of an era and have no idea how a newspaper makes any money.

Our local paper WANTS to go out of business last I heard. Might as well based on their editorial policy, lack of actual news and peoples' declining capability of reading. Too bad, really.

 

[brett]

Will they also lower prices when customer traffic is at a low ebb, almost non extistent


I suspect that will be a definite "NO"

 

[Koolau]

Will they also lower prices when customer traffic is at a low ebb, almost non extistent


I suspect that will be a definite "NO"

I can't help you answer that one 'cause I won't be there.

 

[brett]

Ditto. Been in fast food joint once in the last 15 years.

With our grandchildren. And we both threw away our Big Macs after the first bite. Awful.

 

[njhowie]

Company now in damage control mode. It's history, will never happen now.

https://finance.yahoo.com/news/wendys-not-implement-surge-pricing-151238146.html

 

[SecondAttempt]

Uber does surge pricing and it works. But folks have a choice pay or walk and the distance is almost always too far to walk, so no choice.

But restaurants can't really have surge pricing, I think folks are just going to refuse to buy a $30 hamburger from Wendy's.
I'd eat a PB & Jam sandwich before I'd pay even $10 for a Wendy's hamburger.

I also think this is a horrible idea that will come back to bite them. But in their defense, they did actually say that the surge pricing would mostly involve discounting at slower times. Not sure if I believe that though.

While I have never been a big McDonald's fan, their video menus have driven me to pretty much avoid them entirely. Same with KFC. Menus have gotten so confusing that I find it annoying! I just order something simple and leave, often spending far less than I otherwise would have!

But I realize I'm no longer in their target demographic.

 

[jazz4cash]

It’s the only way they could think of how to use the term ‘AI’ to talk about the burger business.

 

[latexman]

If they can change the price at any moment, then it seems fair to me we can negotiate that price before accepting it. What do you think? Probably a waste of time.

 

[punkinhead]

If they can change the price at any moment, then it seems fair to me we can negotiate that price before accepting it. What do you think? Probably a waste of time.

I had that happen at a paint store during Covid. They mixed my paint then rang it up and the price seemed high so I asked to see a break down. They'd added a 20% "covid adjustment". I refused. They gave in when they realized that I'd walk out and leave them stuck with several gallons of a custom color nobody would buy. Unfortunately with a burger you pay up front so don't have any leverage.

 

[audreyh1]

Ditto. Been in fast food joint once in the last 15 years.

With our grandchildren. And we both threw away our Big Macs after the first bite. Awful.

I remember over 20 years ago when I hadn’t been in a fast food place for a long time already stopping at a DQ on a road trip cause I was hungry. Horrible! None since.

 

[sengsational]

If they can change the price at any moment, then it seems fair to me we can negotiate that price before accepting it. What do you think? Probably a waste of time.

I tried (a long time ago) at a Burger King to negotiate.

I walked in just before closing and the warming bin was jam-packed with burgers. They asked me for my order and I said "whatever is in the warmer, as long as I get 2 for 1" They said "sorry" and I asked why not... they're going to have to throw them all away. Nope, the staff was going to eat 'em! LOL!

Maybe they'll link the electronic menu to the warming tray...their predictive AI said to make too many of one type of burger, and now those have been in the bin almost too long. It could do a flash "2-fer".

So they could use dynamic pricing for a win-win, but I don't see win-win on airlines...I just see a frustrating buying experience. We're going to need a camelcamelcamel app for burgers.

 

[Onda]

American royals Burger King and Her Majesty Dairy Queen.

 

[folivier]

Thankfully in south Louisiana we have many options for fast food other than McD's, Wendy's, BK, etc. It's not unusual to walk into a convenience store and pick up fried chicken, boudin, fried pork chops, fried seafood, burgers, plate lunches, etc. at a cheaper price and everything is fresher.

 

[ShokWaveRider]

Unfortunately, people are fickle, and most will not notice. If everyone boycotted them it would change really fast. But we Americans must have their junk food. Although not us, I cannot remember when I last are some of that junk food. I eat enough at home LOL. We must be doing something right as We still are not considered obese, not even mildly, just normal weight for our age and size.

 

[Music Lover]

Ditto. Been in fast food joint once in the last 15 years.

With our grandchildren. And we both threw away our Big Macs after the first bite. Awful.

I've never understood the attraction to Big Macs.

Our city has dozens of very good individual burger places, so there's no need to go to a chain unless you want to.

 

[Midpack]

I've never understood the attraction to Big Macs.

Our city has dozens of very good individual burger places, so there's no need to go to a chain unless you want to.

People do fast food because it's cheaper and faster, not because they're good...