Fast food chains like McDonald’s have come under scrutiny lately for fluctuating prices at several locations, where franchisees set prices however they like.
Now, Wendy’s is taking price floating to a new level and launching “surge pricing”: Prices on menu items will change in real time based on demand.
Wendy’s CEO Kirk Tanner, who stepped into the role earlier this month, announced the “dynamic pricing” model on a call with investors Tuesday.
“As we continue to demonstrate the benefits of this technology in our company-operated restaurants, franchisee interest in digital menus is expected to further increase, supporting sales and profit growth across the system,” he said.
Related: Wendy’s is launching an AI chatbot to take drive-thru orders
The fast food chain plans to invest $20 million in the new technology, which will include virtual menus that update prices in real time. The company will begin testing in 2025.
“As we have previously shared, we are making a significant investment in technology to accelerate our digital business,” Wendy’s said USA TODAY in a statement. “In addition to the evolution of 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 advantageous offers to our customers through innovations such as digital menus, which will be launched starting from some American restaurants.”
Wendy’s did not immediately respond Entrepreneurrequest for comment.
Last May, Wendy’s announced it was partnering with Google to create an AI-powered chatbot to help streamline the ordering process at drive-thru stores as the company continues to invest in digital technology.
Wendy’s brought in revenue of $540.7 million during the fourth quarter of 2023, with total revenue for the year increasing by $2.18 billion, just over 4% from the same period last year.
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“Throughout my career, I have adopted a customer-centric mindset combined with strong operational execution to drive growth and achieve strategic objectives,” Tanner said earlier this month on the company’s fourth-quarter earnings call. society. “I firmly believe 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 the industry.”
Wendy’s was down 19% year-over-year Tuesday afternoon.
Jonathan Maze, editor-in-chief Catering activities, he told CNN that the program could be a “game changer” in the industry.