Wendy’s will similarly experiment with price increases Uber and Lyftas the company rolls out digital menus in all of its U.S. restaurants by 2025, according to the The company’s earnings announcement in February. As part of the test, burgers, Frosties and other menu items will have “dynamic pricing” that costs more during times of increased demand.
“As early as 2025, we will begin testing additional advanced features such as dynamic pricing,” Wendy’s CEO Kirk Tanner said on the Feb. 15 conference call. “We plan to invest approximately $20 million to introduce digital menu boards to all U.S. company-operated restaurants by the end of 2025.”
One advantage of these digital menu boards is that you can change prices as often as you like. Consumers are familiar with price increases from ride-sharing services like Uber and Lyft, where prices fluctuate significantly based on demand. Dynamic pricing is a relatively new concept in the fast food world with little precedent. Fluid prices change based on supply, demand, competitive pricing and other external factors that can be calculated algorithmically.
A Wendy’s Baconator costs $12.24 in New York City, but with dynamic pricing, that price can fluctuate throughout the day. The price of the burger might go up at lunchtime or go down on a quiet afternoon. Wendy’s did not say how much the prices might fluctuate.
Tanner expects dynamic pricing to result in immediate sales growth, but it’s a risky approach. A majority of consumers (52%) say dynamic pricing is tantamount to price gouging, and 65% say it makes it more difficult to decide where to eat, according to a Capterra survey.
This isn’t the first time Wendy’s has tried to cram tech into your big bag. The company had plans to introduce one AI chatbot powered drive-thru already in May. However, it later emerged that the secret technology was behind some of these experiences were really just people. The company also announced this a fleet of tunnel-dwelling, self-driving robots to help you deliver your order in 2023.
Wendy’s hopes that we’re all used to seeing prices skyrocket on rideshare services and that we won’t mind seeing it on our plate. The company notes that this will initially just be a test enabled by its digital menus.
A spokesperson for Wendy’s told Gizmodo on Tuesday that dynamic pricing will also allow for discounts at slow times of day. The fast food chain says these changes will “boost” traffic during slow times of the day. Wendy’s didn’t comment on higher prices during peak hours, but confirmed those changes could happen as early as next year.
This story originally published At Gizmodo.
