What Will Wendy’s Price Change? The Role of Surge Pricing and Artificial Intelligence in Increasing Demand for Dynamic Pricing, Day-Part Offers, and Menu Changes

“Wendy’s will not implement surge pricing, it is a practice of raising prices when demand is highest, to clarify,” the Wendy’s Vice President said in an email. “We didn’t use that phrase, and we won’t implement that practice.”

Dynamic pricing,day-part offerings, and artificial intelligence-enabled menu changes are some of the enhancements that will begin to be tested in the early 20th century. “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.”

And as noted in that quote above, dynamic pricing isn’t the only bet Wendy’s is making on technology. A year ago, Wendy’s began experimenting with an artificial intelligence at a drive-through in Columbus, OH and bragged that it didn’t need human intervention 86 percent of the time. Fast food chain Wendy’s has already started using an intelligent drive- through assistant in some of its restaurants.

There are also menu changes and suggestive selling. It’s unclear what that means. It could be as simple as 11pm. Do you like the lettuce on the chicken sandwich? I know you are just here for a Frosty before bed, but do you like that too? Either way, it will likely appear alongside surge pricing and an AI chatbot that gets it right 86 percent of the time.

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 might have to drive down the road for a McCafe and an Egg McMuffin.

Shumsky says that these kinds of price changes can be confusing to customers and can annoy them. It can cause the company’s customers to switch to competitors.

Surge pricing has some benefits for consumers, he said. 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 might actually reduce breakfast prices at certain times in order to encourage people to come during what they currently have as relatively 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.

But after news outlets ran stories warning that Wendy’s was planning to hike prices during the busier times of day, company executives tried to better explain what Tanner meant.