Wendy’s says it isn’t going to introduce surge pricing

A Commentary on Wendy’s Plans for Surge Pricing and AI-enabled Menu Changes with Artificial Intelligence, suggestive Selling, and Other Improvements

You may have seen news stories this week suggesting that Wendy’s was planning to implement a practice known as surge pricing, which is when companies increase the price of products and services in real-time as demand goes up.

In the early 20th century we will be testing more enhanced features, like dynamic pricing andday-part offerings along with artificial intelligence and suggestive selling. “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.”

As noted in the quote above, Wendy’s other bets are on technology and dynamic pricing. Last year, Wendy’s started testing an AI chatbot at a drive-thru in Columbus, Ohio, and bragged that it didn’t need human intervention around 86 percent of the time. Now, Tanner says Wendy’s has already rolled out its AI drive-thru assistant in several other restaurants and has seen “ongoing improvement in speed and accuracy.”

There’s also the “AI-enabled menu changes and suggestive selling.” It is unclear what that means. It could be as simple as 11pm. If you were here just for a burger before bed I would ask, “Would you be interested in the lettuce on the spicy chicken sandwich?” Surge pricing and an Artificial Intelligence bot that gets it correct 86 percent of the time, will likely appear along with it.

I, for one, don’t like the idea of my Frosty Cream Cold Brew and Breakfast Baconator getting a price hike during the morning rush. I could go down the road to get a McCafe and an Egg McMuffin.

But Shumsky says these kinds of unpredictable price changes can confuse and annoy customers, who expect to pay a certain price for a good or service. It can erode the trust customers have with a company and drive them to competitors.

Still, he added that surge pricing has some benefits for consumers. It can result in lower prices during non-peak periods, and industries that rely on the relationship between a company and its customers — such as health care — likely won’t embrace surge pricing.

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.

“They talked about, for example, getting more breakfast customers in,” Shumsky said. They could possibly reduce breakfast prices in order to encourage people to come during low demand periods.

Wendy’s didn’t provide many additional details, but it said in a separate statement that the digital menus could allow the company to offer discounts to customers during slower times of day.

Wendy’s executives tried to better explain what they meant after news outlets said that the chain was planning to hike prices during busy times.