Uber-Like Surge Pricing Is Coming For Fast Food
Fast food chain Wendy's announced it's adopting a similar approach to Uber's Surge Pricing policy by dynamically adjusting the prices of its menu items during peak demand periods at certain locations. The controversial strategy seeks to leverage real-time data to align pricing and demand, enhancing efficiency and potentially improving customer satisfaction. From a report: During a conference call earlier this month, Wendy's CEO Kirk Tanner said the fast-food chain would experiment with dynamic 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." Prices seesaw all the time on the sites of online retailers like Amazon that use algorithms and artificial intelligence to monitor competitors and glean insights into individual shoppers, adjusting prices depending on interest in the product or in the brand, said Timothy Webb, an assistant professor at the University of Delaware's hospitality and sport business management program. Coupons and other offers are also routinely dangled in mobile apps to encourage people to make purchases. "A lot of this stuff is already happening even if you don't realize that it is happening. If you have the Starbucks app and I have the Starbucks app, we probably have different offers," Webb said. "We might not be in the drive-through and they just increased the prices, but we are already paying different prices for the same products." But, he says, Wendy's fans will likely see moderate, not massive, price swings during periods of peak demand. "It's not like $200 or $300 on a flight. This is a hypercompetitive industry. If Wendy's goes up $2 to $3 on a burger at dinner time, I would be shocked. People have too many options. They will just walk down the street and eat at Burger King instead," Webb said. "There will just be little price changes here."
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