Wendy's Issues Statement on Reported 'Surge Pricing' Menu Model "We have no plans to do that and would not raise prices when our customers are visiting us most."
By Emily Rella
Fast-food chains like McDonald's have been under scrutiny lately for fluctuating prices at different locations and setting prices however they wish.
Now, Wendy's CEO Kirk Tanner, who stepped into the role earlier this month, has announced a "dynamic pricing" model on a call with investors on Tuesday.
"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," he said.
Related: Wendy's Is Launching An AI Chatbot to Take Drive-Thru Orders
But after widespread backlash on social media on Tuesday, where people compared the initiative to an Uber-like "surge pricing" model, Wendy's issued a statement Wednesday to deny the reports.
"We have no plans to do that and would not raise prices when our customers are visiting us most," the company said.
Earlier this month we issued our fourth quarter and full year 2023 earnings results and included an update on investments we are making in our digital business. One initiative is digital menuboards, which are being added to U.S. Company-operated restaurants. We said these menuboards 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 menuboards 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.
The fast-food chain plans to invest $20 million into the new technology, which will include virtual menu boards that update prices in real time. The company will begin testing in 2025.
"As we've previously shared, we are making a significant investment in technology to accelerate our digital business," Wendy's told USA TODAY in a statement. "In addition to evolving our loyalty program, one of the other benefits of these investments will be the flexibility to change the menu more easily and to offer discounts and value offers to our customers through innovations such as digital menu boards, which will roll out in some U.S. restaurants."
Last May, Wendy's announced that it was partnering with Google to create an AI-powered chatbot to help simplify the ordering process at drive-thru locations as the company continues to invest in digital technology.
Wendy's brought in $540.7 million in revenue during Q4 2023, with total revenue for the year up $2.18 billion, just over 4% from the same time the year prior.
"Throughout my career, I have taken a customer-centric mindset coupled with strong operational execution to guide growth and deliver on strategic objectives," Tanner said earlier this month on the company's Q4 earnings call. "I feel strongly that my experience and leadership philosophy will support our success, and I am excited to bring this perspective to Wendy's at such a pivotal time for the brand and industry."
Wendy's was down 19% year-over-year as of Tuesday afternoon.
Jonathan Maze, editor-in-chief of Restaurant Business, told CNN the program could be a "turning point" in the industry.
