Wendy’s is looking to test having the prices of its menu items fluctuate throughout the day based on demand, implementing a strategy that has already taken hold with ride-sharing companies and ticket sellers.
During a conference call earlier this month, Wendy’s CEO Kirk Tanner said that the Dublin, Ohio-based burger chain will start testing dynamic pricing, also known as surge pricing, as early as next year.
“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling,” he said. “As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system.”
Research and advisory firm Gartner predicts that by 2025, the top 10 global retailers will use dynamic pricing to take advantage of mismatches between supply and demand.
More fast-food joints, restaurant chains and brick-and-mortar retailers are taking advantage of technological advances to tap into real-time trends and swiftly adjust prices, sometimes in seconds.
It’s a tempting proposition for big businesses that can dramatically increase revenue with slight pricing changes.
Wendy’s Co. plans to invest about $20 million to launch digital menu boards at all of its U.S. company-run restaurants by the end of 2025. It also plans to invest approximately $10 million over the next two years to support digital menu enhancements globally.
Tanner, a longtime PepsiCo executive, became Wendy’s CEO earlier this month. He succeeded Todd Penegor, who had served as Wendy’s president and CEO since 2016.
Last year, Penegor announced a restructuring intended to speed decision-making and invest more in new restaurant development, particularly overseas. The chain and its franchisees operate about 7,000 restaurants worldwide.
Shares of Wendy’s fell slightly in Tuesday morning trading.
Contributing: USA Today
