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Wendy’s Says It Won’t Use Surge Pricing After Internet Backlash

The fast food chain Wendy’s clarified that it has no plans to use “surge pricing” during its busiest hours. The announcement, made on Tuesday, followed reports in multiple media outlets suggesting the business is considering experimenting with dynamic pricing that changes throughout the day in response to customer demand.

In a statement, the company asserted that the dynamic pricing model was being misinterpreted. The chain says it intends to reduce prices during slower periods rather than increasing them during busy ones.

“We said these menu boards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants. We have no plans to do that and would not raise prices when our customers are visiting us most. Any features we may test in the future would be designed to benefit our customers and restaurant crew members. Digital menu boards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”

Senator Elizabeth Warren weighed in on the issue on her X account, suggesting the new strategy is exploitative.

“Wendy’s is planning to try out ‘surge pricing’— that means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same. It’s price gouging, plain and simple, and American families have had enough.

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The company is already the most expensive fast-food restaurant among competitors like McDonald’s, Taco Bell, Burger King, and Chick-fil-A.

In an earnings call earlier this month, Wendy’s CEO Kirk Tanner highlighted that upselling and dynamic pricing were key strategies for driving sales growth. “We will begin testing more enhanced features like dynamic pricing and day-part 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.”

Many businesses, including rideshares like Uber and Lyft and ticket distributors like Ticketmaster, employ dynamic pricing models to charge higher rates in response to user demand.

In an email to CNN, the company reiterated that it will not employ a similar system.

“Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. This was not a change in plans. It was never our plan to raise prices when customers are visiting us the most.”

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Juan Castillo, assistant professor of economics at the University of Pennsylvania, told CNN that “surge pricing” was a poor choice of words to describe the pricing strategy.

“Whoever called it surge pricing made the worst marketing mistake you can think of. Surge pricing sent the message to everybody that this is mostly about increasing prices. That created a very negative reaction from the public.”

According to Jonathan Maze, editor-in-chief of the trade publication Restaurant Business, the introduction of dynamic pricing to Wendy’s may lead to other fast food restaurants adopting the technology.

“If Wendy’s idea works, it could get others to do something similar, and I wouldn’t be surprised to see another chain or two test the idea themselves, given what Wendy’s is doing.”

In response to Wendy’s announcement, Burger King is giving out free burgers from Feb. 28 to March 1 on purchases of $3 or more.

“We don’t believe in charging guests more when they’re hungry,” Burger King wrote in a press release announcing the limited-time deal. “Surge pricing? Well, that’s new,” the company added. “Good thing the only thing surging at BK is our flame!”

In order to implement digital menu boards at all of its restaurants in the United States by the end of 2025, Wendy’s intends to spend approximately $20 million. Over the next two years, another $10 million will be set aside to bolster digital menu upgrades internationally.